CHEN Lin, ZHANG Wen-xu, QIAO Zhi-lin. Application of Activity Based Costing in Customer Evaluation and Management[J]. International Journal of Plant Engineering and Management, 2013, 18(1): 8-14

Application of Activity Based Costing in Customer Evaluation and Management
1. School of Management, Northwestern Polytechnical University, Xi'an 710072, P. R. China;
2. School of Economics and Finance, Xi'an Jiaotong University, Xi'an 710062, P. R. China
As plant develops, many industries' automatic level is very high leading to the increasing of indirect cost. Traditional costing methods, which use single standard of distributing indirect cost, cannot calculate customer cost accurately and satisfy managers any more. This paper is aimed on solving the aforesaid problem. In this paper we propose the thought of evaluating customer cost by using activity based costing(ABC) and the traditional model of customer lifetime value(CLV) to improve the CLV model, then analyze the difference of using both models through an empirical study. As a result, ABC can account customer cost more accurately so that the CLV can help managers evaluate customer more effectively.
Key words:    customer lifetime value    activity based costing    customer cost   
Received: 2013-01-17     Revised:
Funds: This paper is supported by National Natural Science Fund under Grant No.71201125;National Social Science Fund under Grant No.09CJY038;General Humanities Social Science Research Program of Ministry of Education under Grant No.10XJC630002;Project of Soft Science of Shaanxi Province under Grant No.2009KRM073;Humanities Social Science and Management Perking Fund of Northwest Polytechnical University under Grant No.RW201209
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