DocumentCode :
2964599
Title :
Cost Coordination Mechanism of New and Remanufactured Products
Author :
Dong Xia-liu
Author_Institution :
Coll. of Econ. & Manage., South West Jiao Tong Univ., Chengdu, China
fYear :
2011
fDate :
12-14 Aug. 2011
Firstpage :
1
Lastpage :
4
Abstract :
For firms remanufacturing their products, the total life-cycle costs and revenues from new and remanufactured products determine their profitability. In many firms, manufacturing and remanufacturing operations are carried out in different divisions. Each division is responsible for only part of the product´s life cycle. Practices regarding transfer pricing across divisions vary significantly among companies, affecting the life-cycle profit performance of the product. In this research, we investigate the consequences of different types of transfer pricing approaches. In a two-period model, we analyze the profitability of different transfer pricing approaches. We determine that a cost coordination mechanism that allocates a portion of the initial production cost to each of the two stages of the product life-cycle is the most effective. We conclude with managerial recommendations concerning cost management.
Keywords :
life cycle costing; pricing; product life cycle management; profitability; recycling; cost coordination mechanism; cost management; firm remanufacturing; initial production cost; life cycle cost; life cycle profit performance; managerial recommendation; product life cycle; profitability; remanufactured product; transfer pricing; transfer pricing approach; two period model; Cost accounting; Manufacturing; Pricing; Profitability; Supply chains;
fLanguage :
English
Publisher :
ieee
Conference_Titel :
Management and Service Science (MASS), 2011 International Conference on
Conference_Location :
Wuhan
Print_ISBN :
978-1-4244-6579-8
Type :
conf
DOI :
10.1109/ICMSS.2011.5998248
Filename :
5998248
Link To Document :
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