Material Flow Cost Accounting System for Decision Making: The Case of Taiwan SME in the Metal Processing Industry

Shen-Ho Chang, AnAn Chiu, Chin Ling Chu, Teng-Shih Wang, Teng-Shih Wang, Tsung-I Hsieh


The purpose of this paper is to examine the implementation of a Material Flow Cost Accounting system (MFCA) and to provide meaningful results for managers to make decision. A case study and the depth interview were employed for small- and medium-size enterprises in the metal processing industry to collect the information for further analysis. The result shows that the implementation of the Material Flow Cost Accounting system can mitigate the probability of dysfunctional decision making, particularly for investment decisions, assist managers in directly filtering out energy or material waste, and enhance the accuracy of product cost evaluations. This paper concludes that the Material Flow Cost Accounting system is not only a management tool, which helps managers achieve cost reductions, but also a mechanism, which realize corporate social responsibility. The results of this investigation support the proposition that implementation of environmental collaboration and monitoring practices by supply chain partners are both environmentally necessary and good business. The paper provides manufacturing managers with a structured approach to improving both environmental and organizational performance through environmental collaboration and monitoring with customers and suppliers

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Asian Journal of Finance & Accounting ISSN 1946-052X


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