Introducing Activity-Based Costing in Farm Management: The Design of the FarmBO System

Carli, Giacomo; Canavari, Maurizio and Grandi, Alessandro (2018). Introducing Activity-Based Costing in Farm Management: The Design of the FarmBO System. In: Papajorgji, Petraq and Pinet, Francois eds. Innovations and Trends in Environmental and Agricultural Informatics. Hershey, USA: IGI Global.

DOI: https://doi.org/10.4018/978-1-5225-5978-8.ch010

Abstract

Recent research indicates that farm managers do not rely on adequate informative support in their decision-making processes. The authors propose a model of a farm management information system which integrates the activity-based costing approach. In describing the design and development of the “FarmBO” system, the authors provide a detailed functional requirement definition and the description of a working system prototype. The solution is designed to show the impact of general costs on the different crops, allocating them on the basis of the production cycle complexity. It includes a report section directly linked to the database which provides crop balance sheets and simulations in terms of what-if analyses. The system allows farm managers to 1) analyze deviations between budgeted and actual costs, 2) compare crop balance sheets across different years, and 3) perform sensitivity analyses. The authors account for prototype validation in two farms and discuss results and possible developments.

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