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THE INVESTIGATION OF COST VARIANCES: A FUZZY SET THEORY APPROACH *
Author(s) -
Zebda Awni
Publication year - 1984
Publication title -
decision sciences
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.238
H-Index - 108
eISSN - 1540-5915
pISSN - 0011-7315
DOI - 10.1111/j.1540-5915.1984.tb01224.x
Subject(s) - variance (accounting) , activity based costing , computer science , set (abstract data type) , order (exchange) , fuzzy set , operations research , fuzzy logic , mathematical optimization , econometrics , mathematics , economics , artificial intelligence , accounting , finance , programming language
In a standard costing system, deviations (variances) of actual cost from standard cost should be investigated in order to help management identify the causes of the variances and who is responsible for them before corrective actions are taken. In reality, however, actual cost rarely equals standard cost and so many variances occur that it is impractical and uneconomical to investigate all of them. These two conflicting factors—the necessity of investigating cost variances and the impracticality of investigating all the variances—present management with the problem of deciding which variances to investigate. In this paper a model, based on fuzzy set theory, for the cost‐variance investigation is proposed and applied to an actual investigation problem faced by a manufacturing company.