Banker and Hughes (1994) have demonstrated the economic sufficiency of activity-based unit costs for a firm's pricing and capacity decisions under uncertainty. This paper investigates the performance of the corresponding policy in a setting where the firm can adapt to changing demand conditions...

In this paper, we seek to provide empirical documentation of the effect of Activity-Based Costing (ABC) information on product and customer-related decisions made by managers in a company. Proponents of ABC argue that when an entity implements ABC, it reaps at least two important benefits:...

This paper investigates the relationship between a firm's cost stability and the frequency with which it acquires data in planning its operations. We first consider a benchmark model of a profit maximizing monopolist whose marginal costs follow an AR(1) process over time. The firm uses forecasts...

This paper creates a model of how management consultants aid clients in their cost reduction programs. It shows the impact of four distinct types of consultants. Brains consultants increase the number of potential options and improve the pool of possible cost reduction techniques. Procedure...

In this paper, I examine issues relating to managers' ability to influence their performance evaluation. In contrast to conventional wisdom, I show that such influencing is not necessarily deleterious to shareholder welfare, despite the fact that it is aimed at maximizing the managers'...

This paper analyzes the impact of capacity costs on bidding strategies of firms participating in procurement auctions. More efficient firms will invest in advance due to their high probability of winning the auction while less efficient bidders prefer to wait with their investments until the...

This paper analyzes the impact of capacity costs on bidding strategies of firms participating in procurement auctions. More efficient firms will invest in advance due to their high probability of winning the auction while less efficient bidders prefer to wait with their investments until the...

This study reports on an action research project carried out in two non-Japanese, UK manufacturing companies which were considering the establishment of a strategic supply partnership. In the assembler company, materials constituted 80% of manufacturing costs with the result that managing supply...

This study investigates determinants of budgetary slack using the framework of agency theory and the methods of experimental economics. A computerized, five-period experiment is designed to test the robustness of prior experimental results documenting budgeting behavior inconsistent with...

Professor Lambert provides a very useful synthesis of the major issues in managerial accounting and the insights that agency theory has provided on those issues. In this discussion, I highlight some of the limitations of these models in examining accounting measurement questions. Lambert calls...