Activity Based Costing

Dr. Ismail Gomaa

Amr Hassan El-Rasoul

Yehia Hassouna B.Pharm

Mostafa Mohamed Hassan

Moataz Mohamed Ossman

Ahmed Raafat Tolymat

Activity Based Management at Stream International

As all these proposals seem worthwhile but lacking the managerial resource prevents from doing all at the same time, with the given data we ought to make the best suitable decision. Some proposals although seeming promising they lack some important information. That’s why during our analysis try to stick as much as possible with the facts given.

Apparently Stream international has high cost of administrative and support process such as material management, quality, billing and shipping. And Michalski the Division Director wants to balance the interests of Stream’s various constituencies as new share holders wants cost reduction, higher return on net assets, and business growth. Customers valued faster time-to-market, lower prices, and better value for their money. Also the rapidly evolving industry was the challenge Michalski loved and he knew that getting in and out of technology at the right time was part of keeping Stream International ahead.

Proposals Analysis

ABM Process Improvement Proposal: Responding To Customer Information Requests

According to Exhibit 5 Responding to Customer Information requests involves 7 Departments at Stream International; the Customer Service Department along with Distribution and Call Center FF+ costs the most regarding Responding to Customer information Requests, all combined cost around $95 K every 6 months.

According to Exhibit 4 which shows Top 20 ABM activities for Crawfordsville, three of those activities are related to this proposal as Tracking and Expediting jobs cost $135 K in Six Months Wage and Dollars, Responding to customer information requests $118 K in Six Months Wage and Dollars, and Maintaining Job File and entering Transactions for Completed Jobs $86 in Six Months Wage and Dollars. And this data is reliable as its...