Activity Based Management

Card Set Information

Author:
elee
ID:
143068
Filename:
Activity Based Management
Updated:
2012-03-22 01:16:07
Tags:
ABM
Folders:

Description:
ABM Lifts Bank's Bottom Line
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  1. How ABM can be applied in other service settings such as banks and hospitals.
    • ABM was part of a six-step process toward increased profitability.
    • Following ABM, which was the third step, the bank initiated an internal benchmarking study followed by an external benchmarking study and a process reengineering project.
  2. ABC: MANUFACTURING VS. BANKING
    • As a time-based industry, banking is significantely different from manufacturing, which was one of the first groups to apply activity-based costing concepts.
    • Once products or services are sold, they stay in production for years.
    • Processing is difficult to schedule because the customer determines the usage of various servies.
  3. MODIFYING ABC FOR BANKING
    • Activities are classified first as customer order-driven activities and ongoing-concern activities.
    • Major effort is made to minimize the cost fo these activities using the value-added, nonvalue-added activities analysis.
  4. Activity-based costing
    • The first product to which activity-based costing was applied was certificates of deposit(CDs).
    • After the initial success with CD project, interest among operating management began to build.
  5. Internal Benchmarking
    This procedure begins by applying the basic concepts of activity-based costing to a process or operation similar to one reviewed previously.

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