20229 - COST MANAGEMENT SYSTEM
CLMG - M - IM - MM - AFC - CLAPI - CLEFIN-FINANCE - CLELI - ACME - DES-ESS - EMIT
Course taught in English
Go to class group/s: 31
As the structure and size of companies have changed, so, too, have the practice of and implications for cost management. Global competition forces firms to study the cost management methods of others; as technology changes the type and amount of data, managers have more flexibility and capability to control resource use, measure performance and make timely decisions. Starting from this preliminary remarks, the course intends to broaden students' appreciation of the role of cost management techniques and applications in organizations. It is designed to build on the student's existing management accounting knowledge by:
- Carrying out costing and quantitative techniques at an advanced level;
- Reviewing the literature that challenges the validity of traditional quantitative techniques.
- Applying and defending the appropriateness of techniques to the production and presentation of information for management decision making by the use of case studies.
During the last two decades a revolution in the practice of cost management has occurred. First, activity-based costing emerged in the eighties as a replacement of the traditional standard cost systems that had remained essentially unchanged since the turn of the century. Second, activity based management became integrated with other cost management techniques, such as kaizen costing and target costing to produce new ways to reduce costs both across the value chain and over the life of the product. At the same time the importance of non-financial measures to inform and motivate performance improvements became apparent.
The course deals with the conceptual leap from feedback to feedforward cost management, leading to effective programs for strategic cost management, and will go through the following issues:
- Cost and performance management systems: the different stage of cost systems from financial reporting to the support to strategic and operational decisions
- Linking resource expenses to cost objects: two stage measurement process; direct and indirect cost assignment; role of nonfinancial measures and indicators for continuing improvement
- Activity based costing in action: the reason for a different methodology, measure the costs of resource capacity; operational and strategic activity based costing in manufacturing companies
- Strategic activity based management for customers and suppliers and for product development
- The emergence for integrated cost systems: challenge of system integration
For regularly attending students, the final grade is determined as follows:
- Final exam: 50%. Written open-book exam centered around the discussion of a case, made available via learning-space two days in advance the due date.
- 2 group assignment: 15%+15%. Assignment deal with cases considered in the course program and highlighted in the analytical program. Throughout the course about fifteen cases are analyzed; each group is required to submit two of them (the composition of each group and the match between groups and cases are stated in first class). Each assignment presented and discussed by each group in plenary session - weights 15%. All members of the group receive the same grade on the case analysis; class discussion and presentation influence the valuation.
- Business Game: 20%. Four session of the course at the end of the program are devoted to a simulation that is played by group of student (not necessarily the same group used for case discussion). All members of the group receive the same grade.
Are considered "regularly attending" the students that compose the final valuation with respect to the issues described at the three points above. The final grade for the entire course will derive from the weighted sum of the grades assigned to each point (opportunely rounded to the nearest entire value). The grade is maintained for all the academic year.
Are considered "not regularly attending" the students that do not combine the three items described at the point above. For these students the evaluation is based on a final written open-book exam centered around the discussion of a case made available via learning-space two days in advance the due date.
In addition, in the same session is requested a (short) written discussion around a case provided in the course analytical program (one or two short questions are submitted).
Students will be provided with case studies and readings (relevant journal articles) for discussions.