Allocating common costs across projects is a challenging problem in management accounting. Analytical techniques for allocating multiple costs are limited in availability. This study aims to propose an analytical method for allocating multiple fixed costs across multiple managerial criteria.
This paper investigates different sequential and data envelopment analysis models to identify conditions and propose solution procedures for multi-criteria multi-resource (MCMR) fixed-cost allocation (FCA) problems.
The paper shows that certain multi-resource, single-criterion problems can be solved as independent, multi-stage, single-resource, fixed-cost allocation problems. However, for MCMR-FCA problems with conflicting criteria, a three-dimensional genetic algorithm cube data structure is necessary to solve them.
This paper presents a range of analytical and heuristic methods for allocating multiple costs and resources across projects based on a broad set of managerial criteria.
To the best of the authors’ knowledge, this study is a pioneering work on allocating multiple fixed costs to multiple projects under multiple managerial criteria.
