Implementation of Target Costing System Based on Net Present Value in a Fuzzy environment

چکیده مقاله

Target costing (TC) is defined as a systematic process of managing
product costs during the design stage of a new product, establishing
market sales prices, and target profit margins as well as reducing the
overall cost of the products over their life cycles. However, most
studies do not examine some factors influencing the adoption of TC
systems for manufacturing firms, and consequently exclude service
firms from their surveys and analysis. Furthermore, they do not take
into account an uncertain environment in a TC system. This paper tries
to overcome these shortcomings in existing researches by considering
some of the most important features of real world TC in a novel and
practical TC model under an uncertain environment. To fill these
research gaps, in this paper, a target costing system is adopted for
making production-related decision for a manufacturing firm by
considering the obtained values in the product and also the net present
value of cash flows. As the definitions and measurements of variables
in a target costing involve varying degrees of uncertainty and
ambiguity, fuzzy set theory and Monte Carlo method are utilized. This
study shows the importance of attributes of TC (namely relative
advantage, compatibility, ease of use, result demonstrability, trialability)
for decision makers to adopt and implement such cost and
management accounting innovation. Finally, a numerical example as a
case study is investigated to demonstrate the applicability of the
proposed model and solution approach. The results indicate that the
proposed fuzzy TC can be useful among the manufacturing and service
firms.

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