A Mathematical Model Designing to Achieve Cost Management in Value Chain with Combinational Approach of AHP & GP: (Case Study: Home Appliance Industries)

Abstract

The purpose of this study is to develop a model for designing and explaining Cost Management Strategies in the home appliance industry in Iran. It has also implemented organizational resource–based view to limit the research domain and focus on organizational actions; then it has used porter value chain (1985) to analyze the cost structure of the company which supports strategic decision making and inter–organizational verifications. Since the life of most industries is dependent on its ability at increasing the accuracy of cost management, the authors try to present a mathematical porter\u27s value chain framework to get a correct understanding of firm\u27s cost behavior and strategic activities. Surveys show that if one considers the supply chain activities and product and development of product activities in value chain model, he will have more optimistic sight of organization activities and more comprehensive tool for analyzing cost structure leading to stable competitive advantages. To test the proposed model, first, a mathematical programming model based on multi objective decision-making model was developed. Then, an active home appliance data is used to assess the validity of the mathematics model and, finally, model results show that the proposed solution improves the use of resources, marketing, and advertising cost, ware-housing cost, optimal budget allocation, raw material and transportation costs