| Activity-Based Cost Accounting (ABC) |
| A cost accounting system that accumulates costs based on activities performed and then uses cost drivers to allocate these costs to products or other bases, such as customers, markets, or projects. It is an attempt to allocate overhead costs on a more realistic basis than direct labor or machine hours. Source: http://www.apics.org/ (10th ed.) top |
| Activity-Based Management (ABM) |
| The use of activity-based costing information about cost pools and drivers, activity analysis, and business processes to identify business strategies; improve product design, manufacturing, and distribution; and remove waste from operations. Source: http://www.apics.org/ (10th ed.) top |
| Agreements |
| An agreement should clearly state what you are buying and its cost. Delivery terms and responsibility, Installation related issues, if applicable, an acceptance provision detailing how and when the buyer will accept the products, warranty issues, and your remedial actions should be clearly spelled out in the agreement. Arbitration and conflict resolution mechanisms should also be included in the contract because even the best written agreements are subject to misinterpretation. A well-developed agreement can provide adequate protection against economic opportunism between parties and lead to a positive relationship. Effective long-term agreements generally have specific, measurable objectives stated in them, including pricing mechanisms, delivery and quality standards and improvements, cost savings sharing, evergreen clauses, and termination of the relationship. Sources: Monczka, R., Trent, R., & Handfield, R. (1998). Purchasing and Supply Chain Management. Cincinnati, OH: South Western College Publishing. |
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