Fuzzy Net Present Value and Fuzzy Benefit-Cost Ratio of Target Costing Pricing System

Today’s, Target Costing (TC) is presented as a systematic process of managing product costs during its design stages, establishing market sales pricing, and target profit margins as well as reducing the overall cost of the products over their life cycles. In this field, however, most studies do not examine some factors influencing the adoption of a TC pricing system especially for manufacturing firms, and consequently exclude service firms from their examinations. Moreover, they do not take into account an uncertain environment in a TC system. This paper tries to overcome these shortcomings in existing studies regarding some of the most important features of real world TC pricing model under an uncertain environment. To fill these research gaps, as there are different types or methods of analysis to determine the economic efficiency, this paper analyzes the fuzzy Net Present Value and fuzzy Benefit-Cost ratio of a TC pricing System, and then compares them together for the cash flows of a manufacturing firm. As the definitions and measurements of variables in a target costing involve varying degrees of uncertainty and ambiguity, fuzzy set theory and Monte Carlo method are utilized. This study shows the importance of attributes of TC (namely relative advantage, compatibility, ease of use, result demonstrability, trial-ability) for decision makers to adopt and implement such cost and management accounting innovation. Finally, a numerical example as a case study is investigated to show the applicability of the proposed model and solution approaches. The results indicate that the proposed fuzzy TC can be useful among the manufacturing and service firms.

کلیدواژه ها:

Target costing ، Net Present Value ، Benefit-Cost ratio ، Fuzzy set ،