AUTHOR:
I Ketut Sujana
ABSTRACT:
The company may apply Activity Based Costing (ABC) system to analyze activity. The application of ABC is an innovation, one of which is to minimize activities providing no additional value and add additional value to a product produced as well as to eliminate activities considered unneeccessary with customer’s demand or not creating additional value. ABC can identify key activities, cost driver and procedures to improve process so it can decrease cost on value chain analysis. Value analysis is a valueable analytical tool to understand activities and provide information on company position in the value in the form of a product and service value. Value chain analysis can be classified into analysis related to outside parties such as supplier linkages and customer linkages and the company’s value chain analysis. The value chain analysis helps the company to identify a company position and analyze activities in value chain and to reduce or eliminate activities that are not create additional value of product and service. The company further can determine competitive strategy,namely, low cost or differentiation. The company must maintain and improve the relationship both with supplier and keep relation with customers, which is finally expected to be able to improve competitive power of he products. The company is necessasry to consider application of informative technology since it is necessasy to maximize product value.
Key words : Activity based costing, supplier linkages, customer linkages, the company’s internal value chain, competitive strategy, low-cost, differentiation
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