Managerial Accounting Information as a Tool for Marketing and the future of Supply Chain

Fact based decision making is the common strategy tool for marketing today.  This technique in marketing is being enhanced with the modernity of real time technology to monitor the activity of the business operation across the supply-chain of the business. 

Several International companies are greatly relying on the data given by Managerial Accounting Information System.  Bank of America for example are gauging their marketing performance across the globe through the real-time financial report, even the supply-chain of the non-profit operation of Red Cross is using the financial information to monitor their marketing operation effectiveness.  Coca-Cola and 7-eleven International operation further reveals its dependence towards accounting data used in real-time streaming performance through their global internet data feed.  

To discuss the fundamental managerial accounting principle used in the modern and complicated database system, basic principles can be recalled from the lessons of Activity-based costing (ABC) and Economic Order Quantity (EOQ) these commonly used mathematical accounting techniques are generally accepted by the International Companies operating globally.

Activity-based costing is a tool to aid decision making by getting the cost information per product and accumulating it as a whole batch of product manufacturing.  By this technique cost drivers can be eliminated across the supply-chain and maximizing the profit as the business continues.  Furthermore, ABC is also used in public sectors like U.S. Veterans Affairs Department for processing the benefits of the U.S. veterans as a whole. 

Some important ABC accounting principles are applied and encoded to the memory of the system used for supply-chain management.  One great example for online business operation using ABC is the “Virtual Bakery” (Super Bakery, Inc.).  The process of the business requires third-party companies to manufacture the ordered product goods.  The main company will only make the required ingredients and the third-party manufacturer will finish the product before it will be delivered to the consumer.  With this strategic move, the main company can eliminate the cost and maximize the profit.

Finally, EOQ or Economic Order Quantity is commonly used by import and export multi-national companies to allow a versatile movement of goods considering the important factor of re-order point, order received time, Total annual cost, holding cost, and ordering cost.  All of the terms mentioned will summarize the exact timing of order from the point of origin to the point of destination.