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Empirical validation of an activity-based optimization system

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Title: Empirical validation of an activity-based optimization system
Authors: Singer, Marcos singer@faceapuc.cl, Donoso, Patricio1
Source: International Journal of Production Economics. May2008, Vol. 113 Issue 1, p335-345. 11p.
Subjects: Industrial efficiency, Steel industry, Manufactured products, Activity-based costing, Material balances
Abstract: Abstract: We present an optimization model for steel manufacturing, whose objective function depends on activity-based costing (ABC). The constraints describe the capacity and the material balance, the product-dependent yield and the electrical balance, for all the activities of the plant. For the model to be reliable, one should validate that it accurately expresses the objective function of the user, and that it defines with precision the constraints that determine the feasible solutions. We validate the cost estimation by empirically testing how accurately it can predict future expenditures. We validate the constraints by comparing the polyhedron they generate with the production possibility set obtained with data envelopment analysis (DEA). We show the model implemented and validated in a Chilean steel manufacturer. The tests prove the model reliable enough for defining the product mix, and for evaluating investments and sourcing alternatives. [Copyright &y& Elsevier]
Copyright of International Journal of Production Economics is the property of Elsevier B.V. and its content may not be copied or emailed to multiple sites without the copyright holder's express written permission. Additionally, content may not be used with any artificial intelligence tools or machine learning technologies. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)
Database: Engineering Source
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Header DbId: egs
DbLabel: Engineering Source
An: 31677649
AccessLevel: 6
PubType: Academic Journal
PubTypeId: academicJournal
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  Data: Empirical validation of an activity-based optimization system
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  Data: <searchLink fieldCode="AR" term="%22Singer%2C+Marcos%22">Singer, Marcos</searchLink><i> singer@faceapuc.cl</i><br /><searchLink fieldCode="AR" term="%22Donoso%2C+Patricio%22">Donoso, Patricio</searchLink><relatesTo>1</relatesTo>
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  Data: <searchLink fieldCode="JN" term="%22International+Journal+of+Production+Economics%22">International Journal of Production Economics</searchLink>. May2008, Vol. 113 Issue 1, p335-345. 11p.
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  Data: <searchLink fieldCode="DE" term="%22Industrial+efficiency%22">Industrial efficiency</searchLink><br /><searchLink fieldCode="DE" term="%22Steel+industry%22">Steel industry</searchLink><br /><searchLink fieldCode="DE" term="%22Manufactured+products%22">Manufactured products</searchLink><br /><searchLink fieldCode="DE" term="%22Activity-based+costing%22">Activity-based costing</searchLink><br /><searchLink fieldCode="DE" term="%22Material+balances%22">Material balances</searchLink>
– Name: Abstract
  Label: Abstract
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  Data: Abstract: We present an optimization model for steel manufacturing, whose objective function depends on activity-based costing (ABC). The constraints describe the capacity and the material balance, the product-dependent yield and the electrical balance, for all the activities of the plant. For the model to be reliable, one should validate that it accurately expresses the objective function of the user, and that it defines with precision the constraints that determine the feasible solutions. We validate the cost estimation by empirically testing how accurately it can predict future expenditures. We validate the constraints by comparing the polyhedron they generate with the production possibility set obtained with data envelopment analysis (DEA). We show the model implemented and validated in a Chilean steel manufacturer. The tests prove the model reliable enough for defining the product mix, and for evaluating investments and sourcing alternatives. [Copyright &y& Elsevier]
– Name: AbstractSuppliedCopyright
  Label:
  Group: Ab
  Data: <i>Copyright of International Journal of Production Economics is the property of Elsevier B.V. and its content may not be copied or emailed to multiple sites without the copyright holder's express written permission. Additionally, content may not be used with any artificial intelligence tools or machine learning technologies. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract.</i> (Copyright applies to all Abstracts.)
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        Value: 10.1016/j.ijpe.2007.09.003
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      – Code: eng
        Text: English
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        PageCount: 11
        StartPage: 335
    Subjects:
      – SubjectFull: Industrial efficiency
        Type: general
      – SubjectFull: Steel industry
        Type: general
      – SubjectFull: Manufactured products
        Type: general
      – SubjectFull: Activity-based costing
        Type: general
      – SubjectFull: Material balances
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      – TitleFull: Empirical validation of an activity-based optimization system
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              Text: May2008
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