The Differences Of Cost Utility And Their Control

Emerged in industrial economic systems, Flexible Manufacture & Management System (FMS) and Management Information System (MIS) have been formulating a new characteristic for all of the economic system now and on. Accompanied with that are the high-grading trend of costing and the differences of cost utility due to the inconsistence of different cost elements. This process arose in the transformation course from agricultural to industrial economy pattern, and strengthened in the further transformation course to intellectual economy pattern. As the decrease of the portion of the flexible resources (mainly material resources), the effectiveness of the traditional cost control (TCC) methods that mainly based on the thrift and restraint intention is decaying. Therefore there is an imperative need for us to explore a new cost control theory appropriate to the new economic situation.As a starting point of the study, this dissertation make a clear discrimination of cost and expenditure with the concept of utility, and proposed a brood cost control prospect on the base of the final aim of economic systems. With a sense of "cost is the offsets to its economic utility aims", the dissertation makes a more detailed review of cost theories and practices home and abroad. The cost control ideology in the western management theories emerged before the industrial revolution, and had been got maturing in the revolution. From Adam Smith's thrift and Charles Babbage' working efficiency to the method system of TCC, and later on the ABC theory and the strategic cost management theory aroused in 1980s, each theory and its related methods had tackled the very most prominent cost problems under its corresponding condition, made some economic success in a certain degree. But due to the ignorance of cost utility and the broad cost control sense, all of them had a fatal deficiency of zealous for short-term interests. In a sense, TCC methods pertain to some kind of extensive control, and it is usually applicable to the situations of resource economy patterns with a lower level of management. In the evolution of TCC theories, the significance of behavioral science is its concern for and description of the complication of costing that relieves the constraints of Taylor's scientific management theory from the dead end. However, we did not get the "real cost" cognition until the outcrop of the ABC theory and strategic cost management theory.As for the causes of the deficiencies of TCC, this dissertation regards that as too narrow in its research scope, inoperative duo to the inadequate of information and micro-low-grading duo to the restrictions of thrift idea. In economic sense, the efficiency of cost control indicate the limitation of the low and inefficiency portion of cost utility and the intensifying of the more efficient portion. This is the basic motivation of the researches of the differences of cost utility. Therefore, this dissertation asserts that the efficiency of TCC will be declining unremittingly under the coming FMS and MIS situation, and a modern cost utility control (MCUC) on the base of utility differences analysis will be the only way out in this field.On the base of the explanation and description of the theory foundations and references of the rational core of TCC, the dissertation proposes a white-box theory and principles of cost utility analysis in detail. Further more, a modern cost utility control system and model is formulated in chapter six. In particular, the theory of MCUC consists of three basic elements: the theory of white-box, the theory of constraints (TOC) and the principles of cost utility analysis. The theory of white box is a prerequisite for cost utility control under the FMS condition, but it will lose its operational bases without the principles of cost utility analysis and the determination of utility differences. TOC provide the new cost theory with a new melt point of cost control and its environments. Without TOC, the differences of cost utility will be meaningless.MCUC experienced an...