| Author: | Kee, R. |
| Title: | Integrating ABC and the theory of constraints to evaluate outsourcing decisions |
| Journal: | Journal of Cost Management
1998 : JAN/FEB, VOL. 12:1, p. 24-36 |
| Index terms: | ACCOUNTING DECISION MAKING COMPANIES COSTS OUTSOURCING |
| Language: | eng |
| Abstract: | Outsourcing is a process for restructuring a firm's operations to create a focused, a more flexible, and competitive production structure. Outsourcing involves differentiating btw. commodity components and those that are strategic to the firm's products. Information developed from the theory of constraints (or TOC) and activity-based costing (or ABC) may be integrated to evaluate the economic consequences of outsourcing commodity and strategic components. The ABC and TOC may be used to evaluate the economic feasibility of outsourcing. |
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