Product Costs as Decision Aids: An Analysis of Alternative Approaches (Part 2)

Abstract

SYNOPSIS In the first part of this two-part paper (Balakrishnan et al. 2012), we used a common platform to characterize four popular approaches for computing product costs. In this part, we compare the approaches along three dimensions: (1) the cost of system implementation and maintenance, (2) the ability to provide decision-relevant data, and (3) the provision of incentives to manage the demand for resources. As no system clearly dominates, we show how future approaches might blend the best features of current systems.