Abstract
Achieving the differentiation of economic units amid the adoption of modern business techniques, intensifying competition, and business globalization necessitates a profound focus on product quality levels and their associated costs, known as quality costs. Many global companies have analyzed these costs and implemented specialized programs to minimize them, thereby ensuring significant savings and streamlining the decision-making process. Given the current climate of global competition and rapid technological advancements in both industry and markets, economic units striving for survival and performance excellence must enhance their operations based on sound scientific and practical foundations tailored to their activities through a holistic strategic lens. Accordingly, economic units differentiate themselves across multiple dimensions—primarily cost, quality, flexibility, and delivery—based on continuous study of customer desires and value perceptions, allowing them to be recognized as the most cost-effective, superior, modern, or rapid. Just as these units vary in their strategies, they also differ in the approaches used to achieve competitive advantage, with the Activity-Based approach being a prominent method. In light of the limitations of traditional costing systems, which lack a clear causal link between product costs and consumed resources—leading to inaccurate cost calculations and insufficient data for optimal resource allocation—there is a critical need to implement Activity-Based Costing (ABC). This approach is grounded in the principle that activities consume resources, while products or services consume activities. To achieve the research objectives, this study is structured into four sections: the first serves as an introduction to competitive advantage; the second addresses the analysis of quality costs based on activities; the third is dedicated to the practical application and testing of this analysis within the Midland Refineries Company; and the fourth presents the conclusions and recommendations derived from both the theoretical and empirical study.
DOI
10.33095/jeas.v13i47.1199
Subject Area
Accounting
First Page
239
Last Page
264
Recommended Citation
Obaid, I. A., & Hulayhi, J. I. (2007). The Impact of Activity-Based Quality Cost Analysis on Achieving Competitive Advantage. Journal of Economics and Administrative Sciences, 13(47), 239-264. https://doi.org/10.33095/jeas.v13i47.1199
