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.
The objective of this course is to help students be able to deal with cost management issues in a pragmatic perspective, whatever their background. This is accomplished by discussing case studies presented by groups of 3-4 students (each group should present no more than 3-4 cases); the purpose of this assignments is to develop students' ability to connect cost management concepts to current business practices and problems, and to effectively communicate students' perspectives. Besides, some sessions are dedicated to a business game that is played by groups; the aim is to simulate the effect of decision making activities on business performance. In general, both for cases discussion and business game section, all members of each team normally receive the same grade; however, the faculty reserves the right to assign different grade where and if useful.
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 goes 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 attending students:
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.
Group assignment (25%). Assignments deal with cases analyzed during the course and highlighted in the analytical program. Throughout the course at least fifteen cases are examined and discussed; each group is required to submit 3-4 of them (the composition of each group and the match between groups and cases are stated during the first class). Each assignment is presented and discussed by group in plenary session. All members of the group receive the same grade on the case analysis; class discussion and presentation influence the valuation.
Business Game (25%). Some sessions of the course at the end of the program are devoted to a simulation played by groups of student. All members of the groups will 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 derives 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.
For non attending students:
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 will be requested a written discussion around a case discussed in the course (one or two short questions are submitted).
Students are provided with case studies and readings (relevant journal articles) for discussions. In other terms, class notes, slides and other materials produced during class (cases presentation) are posted on e-learning at the end of each session. Additional readings will be made available through the e-learning platform, in the website dedicated to the course.