Title: Life-Cycle Costing: Using Activity-Based Costing and Monte Carlo Methods to Manage Future Costs and Risks
Author: Jan Emblemsvåg
Publisher: John Wiley & Sons, New York
Book information: Hardcover, 320 pages, ISBN: 0-471-35885-1
Most cost management efforts concern understanding the past but this book focuses on future costs, their uncertainties, and risks. It presents a new approach toward Life Cycle Costing based on the principles of Activity-Based Costing, uncertainty and risk management, and Monte Carlo methods. This book provides a how to methodology and shows readers that they can perform any type of cost management better than before if they introduce uncertainty into their models and exploit to the maximum what happens.
“This book skillfully combines the ideas of life cycle costing and activity based costing to come up with an approach to effectively manage costs in an uncertain environment.”
Dr. Arnold Schneider
Professor of Accounting, Georgia Institute of Technology
“Traditional cost cutting has always had a backward focus and created lots of negative reactions – both rational and irrational. In his new book Jan Emblemsvåg introduces a new forward looking life-cycle approach to cost management. Employing foresight instead of hindsight puts the focus on processes, uncertainty and risks and future value creation.
The author’s strong side – besides having a good holistic concept – is the ability to express himself accurately and clearly on very complicated and sophisticated theory. Managers, consultants and others with interest in cost management will be enlightened and inspired by the book – and no doubt find it of great help in applying the methods and processes that are presented.
The idea of turning uncertainty into an asset for managers is quite unique. Making budgeting less data oriented and more risk oriented is another good idea. The next step now is to make operative approaches and apply the theory in practical situations!”
Senior Partner John-Erik Stenberg