Operations Research, Systems Engineering and Industrial Engineering Commons^™

Combining Activity-Based Costing With The Simulation Of A Cellular Manufacturing System, Paul Savory, Robert Williams, Rodney Rassmuseun

Department of Industrial and Management Systems Engineering: Faculty Publications

Discrete-event simulation is one of the most effective techniques for analyzing a manufacturing system. Unfortunately, little attention is given to using simulation models to estimate the economic impact of a proposed system configuration. This paper defines how activity-based costing (ABC) concepts can be incorporated into a discrete-event simulation model. Special emphasis is on demonstrating how decision making can be aided by having the simulation create a detailed “Bill of Activity” describing costs associated with manufacturing a part. The integration of ABC and simulation is illustrated by evaluating the impact of a proposed manufacturing cell configuration. The additional costing information aids …