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| Typically, a BPR project begins with the end in mind where the end goal is to achieve one or all of the following objectives: - Increase service level - Reduce total process cycle time - Increase throughput - Reduce waiting times - Reduce activity cost - Reduce inventory costs Re-engineering business processes involves changes in people, processes and technology over time. Computer simulation becomes essential to comprehend and evaluate the interactions of people with processes and technology with the corresponding scenarios and outcomes. By adjusting decision variables in a model without the cost and risk of disrupting existing operations, or building a new system, one can accurately predict, compare, or optimize the performance of the re-engineered process. |
| Activity Based Costing ABC is a technique for accumulating cost for a given cost object that represents the total and true economic resources required or consumed by the object. The goal of ABC is to model the causal relationships among resources, activities, and entities in assigning overhead costs. Computer simulation provides more accurate cost statistics than results obtained from static analysis since a simulation model incorporates resource interdependencies and random effects. Benefits of simulation to ABC: - Focus on cost drivers - Strategic pricing - Evaluation of capital investment |