ACTIVITY BASED COSTING (ABC) AS AN APPROACH TO OPTIMIZE PURCHASING PERFORMANCE IN HOSPITALITY INDUSTRY

Year 2011, Volume: 3 Issue: 2, 319 - 329, 01.12.2011

Mohamed S. El-deeb Yasser Tawfik Mohga Bassim Emad Elwy

Abstract

ABC (Activity Based Costing) system has proved success in both products and
services. The researchers propose using a new model through the application of
ABC approach that can be implemented in purchasing department as one of the
most dynamic departments in service sector to optimize purchasing activities
performance. The researchers propose purchasing measures, targeting customers’
loyalty ensuring the continuous flow of supplies. The researchers used the
questionnaire as a tool of data collection method for verifying the hypothesis of
the research. Data obtained was analyzed by using Statistical Package for Social
Sciences (SPSS).
The results of the research based on limited survey that have been distributed to
number of hotels in Great Cairo region. Our research was targeting three hundred
purchasing manager and staff through five star hotels. It is recognized that further
research is necessary to establish the exact nature of the causal linkages between
proposed performance measures and strategic intent in order to gain insights into
practice elsewhere.

Keywords

Hospitality-Purchasing component-ABC-Performance measurements

References

• Askarany, D.; Smith, M.; Yazdifar, H. (2007), “Technological innovations, activity based costing and satisfaction”, Journal of Accounting-Business & Management, No. 14, pp. 53-63.
• Bescos, P.L.; Cauvin, E.; Gosselin, M. (2002), “Activity based costing and activity based management: a comparison of the practices in Canada and in France”, Comptabilite-Control- Audit, Special Issue – May, pp. 229-244.
• Byrne S, Stower E, Torry P (2009). Activity Based Costing Implementation Success in Australia. J. Appl. Manage. Acc. Res., 7(1): 37-51.
• Clarke P, Mullins T (2001). Activity Based Costing In The Non- Manufacturing Sector In Ireland: A Preliminary Investigation. Irish. J. Manage, 22(2): 1.
• Cooper, R. and Kaplan, R.S. (1997) Cost & Effect: Using Integrated Cost Systems to Drive Profitability and Performance. Boston: Harvard Business School Press.
• Cooper, R., & Kaplan, R. S. (1992, September). Activity-Based Systems: Measuring the Costs of Resource Usage. Accounting Horizons, 6(3), 1-13.
• Debor, E. L. and Eragbhe, E. (2005) Implementing Activity - Based Costing in the Health Service Industry: A survey of some private clinics in Benin city, Nigeria Bayero International Journal of Accounting Research 1(2) 56-67.
• Groot, T. (1999) “Activity based costing in US and Dutch Food Companies”, Advances in Management Accounting, No. 7. pp. 47-63.
• Innes, J. & Mitchell, F. (1997). The application of Activity-based costing in the United Kingdom’s Largest Financial Institutions. The Service Industries Journal, 17 (1), 190-203.
• King, M., Lapsley, I., Mitchell, F., & Myes, J. (1994). Costing needs and practices in a changing environment: The potential for ABC in the NHS. Financial Accountability & Management, 10(2): 143-160.
• Krumwiede KR, Roth HP (1997). Implementing information technology innovations: The activity-based costing example. SAM Advanced. Manage. J., 62(4): 4-13.
• Leenders, M. et al., (2002), Purchasing & Supply Management, McGraw Hill.
• Pavlatos, O., and Paggios, I., (2009), “Activity Based Costing in the hospitality industry: evidence from Greece”, Journal of Hospitality & Tourism Research, Vol.33, No.4, pp.511-527 (Sage).
• Peter B.B. Turney, (2008), “Activity-Based Costing An Emerging Foundation for Performance Management”, SAS Institute Inc.
• Roehm A., Critchfield A. and Castellano F., (1992), “Yes, ABC Works With Purchasing, Too”, Journal of Accountancy, 174(5), 58–62.
• Van Weele, A.J. (2005), Purchasing and Supply Chain Management, Thomson Learning.
• Yanren X, Wenbin S, Thomas WL (2008). Activity-Based Costing Popularity in China. Cost. Manage, 22(3): 40-48.