The Benefits of Activity-Based Costing in Supply Chain Management: A Contingency Theory Perspective

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School of Business | Bachelor's thesis
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Date

2024

Department

Laskentatoimen laitos

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Mcode

Degree programme

Laskentatoimi

Language

en

Pages

22 + 9

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Abstract

As the business environment changes and companies start to rely more on their supply chains, the success of the companies relies heavily on effective management of the supply chains. To do this, supply chain management needs information from all activities and processed within the chain. Activity-based costing can answer this issue by providing accurate, timely, and detailed information. This thesis will investigate activity-based costing in supply chain management through the lens of contingency theory, to understand what are both the allowing and limiting contingencies for implementing this tool, and how does activity-based costing support supply chain management. The main research question is: under what conditions does activity-based costing provide the benefits to supply chain management? This thesis will be conducted as a structured literature review. This approach allows to combine theory with new insights and suggestions for future re-search. The contingency theory was built by investigating eight articles related to supply chain cost management. The findings show that when supply chain partners mutually share information and have a trust-based relationship, there is an organizational alignment, and the level of operational complexity meets activity-based costing’s needs, this tool can be implemented. Activity-based costing could enhance decision-making, foster collaboration, and manage complex systems.

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Thesis advisor

Salehi, Hamed

Keywords

management accounting, supply chain, supply chain management, activity-based costing, contingency theory

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https://urn.fi/URN:NBN:fi:aalto-202501191337

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[kand] Kauppakorkeakoulu / BIZ