Activity-based costing

Abstract: We gathered information on the cost-effectiveness of life-saving interventions in the United States from publicly available economic analyses. "Life-saving interventions" were defined as any behavioral and/or technological strategy that reduces the probability of premature death among a specified target population. We defined cost-effectiveness as the net resource costs of an intervention per year of life saved. To improve the comparability of cost-effectiveness ratios arrived at with diverse methods, we established fixed definitional goals and revised published estimates, when necessary and feasible, to meet these goals. The 587 interventions identified ranged from those that save more resources than they cost, to those costing more than 10 billion dollars per year of life saved. Overall, the median intervention costs $42,000 per life-year saved. The median medical intervention cost $19,000/life-year; injury reduction $48,000/life-year; and toxin control $2,800,000/life-year. Cost/life-year ratios and bibliographic references for more than 500 life-saving interventions are provided.

Abstract: This report is an update of NREL's ongoing process design and economic analyses of processes related to developing ethanol from lignocellulosic feedstocks The US Department of Energy (DOE) is promoting the development of ethanol from lignocellulosic feedstocks as an alternative to conventional petroleum-based transportation fuels DOE funds both fundamental and applied research in this area and needs a method for predicting cost benefits of many research proposals To that end, the National Renewable Energy Laboratory (NREL) has modeled many potential process designs and estimated the economics of each process during the last 20 years This report is an update of the ongoing process design and economic analyses at NREL We envision updating this process design report at regular intervals; the purpose being to ensure that the process design incorporates all new data from NREL research, DOE funded research and other sources, and that the equipment costs are reasonable and consistent with good engineering practice for plants of this type For the non-research areas this means using equipment and process approaches as they are currently used in industrial applications For the last report, published in 1999, NREL performed a complete review and update of the process design and economic model formore » the biomass-to-ethanol process utilizing co-current dilute acid prehydrolysis with simultaneous saccharification (enzymatic) and co-fermentation The process design included the core technologies being researched by the DOE: prehydrolysis, simultaneous saccharification and co-fermentation, and cellulase enzyme production In addition, all ancillary areas--feed handling, product recovery and purification, wastewater treatment (WWT), lignin combustor and boiler-turbogenerator, and utilities--were included NREL engaged Delta-T Corporation (Delta-T) to assist in the process design evaluation, the process equipment costing, and overall plant integration The process design and costing for the lignin combustor and boiler turbogenerator was reviewed by Reaction Engineering Inc (REI) and Merrick & Company reviewed the wastewater treatment Since then, NREL has engaged Harris Group (Harris) to perform vendor testing, process design, and costing of critical equipment identified during earlier work This included solid/liquid separation and pretreatment reactor design and costing Corn stover handling was also investigated to support DOE's decision to focus on corn stover as a feedstock for lignocellulosic ethanol Working with Harris, process design and costing for these areas were improved through vendor designs, costing, and vendor testing in some cases In addition to this work, enzyme costs were adjusted to reflect collaborative work between NREL and enzyme manufacturers (Genencor International and Novozymes Biotech) to provide a delivered enzyme for lignocellulosic feedstocks This report is the culmination of our work and represents an updated process design and cost basis for the process using a corn stover feedstock The process design and economic model are useful for predicting the cost benefits of proposed research Proposed research results can be translated into modifications of the process design, and the economic impact can be assessed This allows DOE, NREL, and other researchers to set priorities on future research with an understanding of potential reductions to the ethanol production cost To be economically viable, ethanol production costs must be below market values for ethanol DOE has chosen a target ethanol selling price of $107 per gallon as a goal for 2010 The conceptual design and costs presented here are based on a 2010 plant start-up date The key research targets required to achieve this design and the $107 value are discussed in the report« less

Abstract: The traditional ABC model has been difficult for many organizations to implement because of the high costs incurred to interview and survey people for the initial ABC model, the use of subjective and costly-to-validate time allocations, and the difficulty of maintaining and updating the model as (i) processes and resource spending change, (ii) new activities are added, and (iii) increases occur in the diversity and complexity of individual orders, channels and customers. Time-driven ABC requires estimates of only two parameters: (1) the unit cost of supplying capacity and (2) the time required to perform a transaction or an activity. A time-driven ABC model: - can be estimated and installed quickly - is easily updated to reflect changes in processes, order variety, and resource costs - can be data fed from transactional ERP and CRM systems - can be validated by direct observation of the model's estimates of unit times - can scale easily to handle millions of transactions while still delivering fast processing times and real-time reporting - explicitly incorporates resource capacity and highlights unused resource capacity for management action - exploits time equations that incorporate variation in orders and customer behavior without expanding model complexity The paper uses simple numerical examples to articulate the fundamentals of time-driven ABC and provides several examples of companies that have implemented the approach and enjoyed rapid and significant profit improvements.