Purpose – The main objective in writing this paper and conducting this research is to enhance the productivity in manufacturing operations by making them cost effective. Design/methodology/approach – This paper presents a target‐costing system and model developed for the turning operation and it has a user interface designed in Microsoft Visual Basic® with a database developed by using Microsoft Access®. An algorithm is developed to apply the concepts of target‐costing that selects the machining parameters and then determines the machining cost. A geometric programming model (Gopalakrishnan and Al‐Khayyal) was used in the development of this system. Findings – The research determined that target‐costing models can be developed for the manufacturing industry and can be implemented in realistic manufacturing environment. The research also showcased the utility of the target‐costing model in terms of the underlying detailed system level parameters. Research limitations/implications – The research focuses on one manufacturing process but can be extended to other manufacturing processes and business cost and profit centers for providing overall and enhanced benefits at the corporate levels. Practical implications – The research details the development of a model that has been validated using practical shop floor data, hence implying its application in a wide variety of situations. Originality/value – The original value of the paper lies in identifying the critical parameters and modeling approach towards target‐costing.
Journal of Manufacturing Technology Management – Emerald Publishing
Published: Feb 13, 2007
Keywords: Design and development; Target costs; Operations and production management