INTEGRATION OF TOTAL COST OF OWNERSHIP AND ACTIVITY-BASED COSTING TO RATIONALIZE SUPPLIER SELECTION DECISIONS: CASE STUDY
Abstract
The research aimed on demonstrate the possibility of integrating total cost of ownership (TCO) with activity-based costing (ABC) and the contribution of this integration in rationalizing the decision to select suppliers by data envelopment analysis (DEA) in the Iraqi environment. The research included the foundations of the integration of (TCO) with (ABC) and the importance of accounting information resulting from that integration in rationalizing decision-makers by focusing on decisions related to choosing suppliers, and testing this in the general company for the Pharmaceutical industry as a case study. the research concluded that measuring the (TCO) for products will be more effective when integrated with the (ABC) method. as the latter gives a basic basis for the activities to be counted and measured its cost and then its contribution to the value of the product. and as a result of enhancing the accuracy of measuring the (TCO) through its integration with the cost method of the activity (ABC), the selection of the product will be based on a more effective decision, through the use of data envelopment analysis (DEA) to compare between suppliers.
Keyword : Total cost of ownership (TCO); Activity Based Costing (ABC); Supplier selection decision; Data Envelopment Analysis (DEA).
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References
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