Integral to strategic cost management is the choice of procuring flexible versus committed resources conditioned on demand uncertainty. Prior research shows that costs respond less to decreases than increases in sales activity when firms invest in committed resources. We analyze asymmetry in...

In the asymmetric cost behavior model, managers play an active role in determining cost behavior by adding or removing resources as activity changes. Cost stickiness occurs when managers deliberately retain slack resources resulting from a decline in sales activity between periods. Because both...

The traditional view of cost behavior assumes a simple mechanistic relation between cost drivers and costs. In contrast, contemporary cost management research recognizes that costs are caused by managers' operating decisions subject to various constraints, incentives, and psychological biases....