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Hi
Can u plz explain activity based management in easy and simple language. I somewhat get blank whenever i try to read it from the book. plz help!Best regards
AliWell, I assume you know what activity based costing is. Activity based budgeting is using the costing information, such as cost drivers, to create a budget. All activity based management is is using that information to manage with. For example, what would the effect be of increasing batch sizes or reducing material handling? Management decisions are made using ABC information.
HTH
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Activity Based Costing does the calculation of various costs, profits etc. This is like a thermometer that tell you your temprature. The doctor has to see the temprature and other things to decide whether the patient has normal fever or hyperthermic. According to that the medication will happen.
ABC is thermometer. One has to analyze the calculated values and take action. Activity Based Management is ABC plus analysis and action take together.
By definition it is manageing your business thru’ managing your activities to internal operations or customer value.
I hope this helps you.
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