MAF 635

Strategic Management
Accounting;
Activity
Management &
Prepared
byBased
;
Paretobinti
Analysis
Farhana
Taib
2010828344
Nurul Naquiah binti Yunos
Siti Nurain binti Abd Jalil
2010982619
Wan Zulaikha binti Zakaria
(JACC2208A)

2010808328
2010907959

Activity Based
Management (ABM)

Presentation Outline
1.0 Introduction of ABM
2.0 Definition of ABM
3.0 How to use ABM
4.0 Benefits and drawbacks of ABM
5.0 Conclusion

1.0 Introduction of ABM

Have been around for more than 15
years.
Radical change in cost management.
Before this ABM only be use in
manufacturing organizations but now it
will be use every sectors.
ABM draw ABC to provide management
reporting and decision making.

2.0 Definition of ABM

 Measure key performance

Eliminate on non value added
cost root
Determine root cost driver
Understand organization
activities
Identify major activities

Step
5
Step
4
Step
3
Step
2
Step
1

4.0 How to use ABM

Example of value-added
activity & non value-added
activity

E.g Manufacturing car activity

activities

Printing the car

Put airbags
Storing the car
Moving the car to
store

Value-added
activity
(RM000)

Non-value added
activity (RM000)

2,000
200
1000
500

4.0 Benefits of ABM

Manufacturing

flexibility
investment

Redundant
cost

Reengineering
effort

5.0 Why implementation

failed?

Lack of
support

Time
consumi
ng

6.0 Conclusion

Fundamen
tal shift

Knowledge
&
informatio
n

More than
accountin
g tools

Pareto Analysis

Presentation outline
1.0 Introduction/History
2.0 Pareto Principle
3.0 How to use Pareto Analysis
4.0 Advantages of Pareto Analysis
5.0 Disadvantages of Pareto Analysis
6.0 Conclusion

1.0 Introduction/History

2.0 Pareto Principles

When to use it?

3.0 How to use Pareto

Analysis

Example 1 : What are causes on customer

complaint on clothing line in XYZ company
Step 1 : Identify possible causes
Potential causes
Parking difficult
Sales representative was rude
Poor lighting
Layout confusing
Size limited
Clothing faded
Clothing shrank

 Step 2 : Conduct analysis and assessment

Potential
causes

Defects

Percentage,
%

Parking difficult

85

28

28

Sales
representative
was rude

60

19.7

47.7

Poor lighting

40

13

60.7

Layout confusing

38

12.5

73.2

Size limited

36

11.8

85

Clothing faded

35

11.5

96.5

Clothing shrank

10

3.5

100

304

100

TOTAL

Cumulative
,%

Step 3 : Summarize and Graphing the

result

Step 4 : Interpreting and Applying the result

Parking difficulties is the most significant
effect on customer service dissatisfaction
The other categories are having a rather
trivial effect
Need to concentrate our efforts on the
following two complaints if we want to improve
customer satisfaction

4.0 Advantages of Pareto

Analysis

5.0 Conclusion
Pareto analysis is a simple technique for
prioritizing problem-solving work so
that the first piece of work you do
resolved the greatest number of
problems