Costing of the Production and Delivery of Ready-Mix-Concrete

The paper presents a model for costing production and transportation of ready-mix-concrete (RMC) based on type of the mix and customer site information. The on-floor cost of the mix is based on the type of concrete and is estimated using activity based costing (ABC). The cost of transporting RMC to customer s site is obtained as a function of traveling distance, traffic factor, and demand. Volume-based discounts, penalty for late delivery, and cost of mix spoilage are considered. Moreover, the paper provides a cost ground for improving the RMC production system using activity based management (ABM) to improve the financial performance of the company. The proposed model is applied at a local RMC company where obtained results show differences between the costing system of the company and that using the proposed model.