Using activity-based costing to evaluate capital investments for green manufacturing systems

Wen Hsien Tsaia, Hui Chiao Chena, Jau Yang Liub, Shu Ping Chena, Yu Shan Shena

Research output: Contribution to journalArticlepeer-review

26 Scopus citations

Abstract

The purpose of this study is to assess how an activity-based costing (ABC) system can assist the justification of capital investments for green manufacturing systems (GMSs). We provide an investment decision model and a numerical example for the justification of GMS based on the ABC system to include not only the direct performances but also the intangible benefits that are generated by the adoption of GMS. Our findings provide insight into the value of capital investments for a GMS based ABC system and demonstrate the opportunity to reduce pollution while simultaneously improving the value of investment.

Original languageEnglish
Pages (from-to)7275-7292
Number of pages18
JournalInternational Journal of Production Research
Volume49
Issue number24
DOIs
StatePublished - 1 Dec 2011

Keywords

  • Activity-based costing (ABC)
  • Capital investments
  • Environmental management
  • Green manufacturing system (GMS)
  • Net present value (NPV)

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