Activity-Based Costing applied to automotive manufacturing

This paper discusses a novel model, based on Activity-Based Costing, developed to analyze and predict energy usage in the manufacturing industry. In this approach, we have modified a cost management tool called Activity-Based Costing (ABC) to include environmental aspects along with costs metrics. A case study was performed on a General Motors (GM) manufacturing facility to evaluate Demand and Response offers from a local utility company to demonstrate the utility of this approach. This study resulted in an ABC predictive energy model which can be used with emerging Smart Grid opportunities to provide a competitive advantage to the manufacturing industry.