A planning and cost allocation procedure for computer system management

J. F. Nunamaker, A. Whinston

Research output: Contribution to conferencePaperpeer-review

1 Scopus citations

Abstract

The problems of allocating costs of a computer system are discussed, and a procedure is presented to solve these problems. The concept of a Responsibility Center is presented, and cost allocation rules for the operation of the Responsibility Center are developed. The cost allocation scheme influences users of a computer facility to adjust their demands for processing to that level most beneficial to the overall organization in question. Four conditions form the basis for the development of the cost allocation formula: (i) Charges for the use of a joint facility must cover cost; (2) a user's charges are based on the incremental cost caused by the user; (3) the charge is independent of the names assigned to users or ordering of users (if some users cause the same incremental costs, then the user's charges are the same); and (4) if the user changes his requirements and as a result his incremental costs are changed, then the cost allocation is changed appropriately. The costing procedure based on the above four conditions provides a rational way to distribute costs; it allocates greater costs to the user whose alternative costs are greater. A five step planning procedure implements this cost allocation procedure.

Original languageEnglish (US)
Pages11-26
Number of pages16
DOIs
StatePublished - Oct 17 1972
Externally publishedYes
Event3rd Annual SIGCOSIM Symposium on Major Issues Confronting Managers of Computer Resources, SICOSIM 1972 - Gaithersburg, United States
Duration: Oct 17 1972Oct 18 1972

Conference

Conference3rd Annual SIGCOSIM Symposium on Major Issues Confronting Managers of Computer Resources, SICOSIM 1972
Country/TerritoryUnited States
CityGaithersburg
Period10/17/7210/18/72

ASJC Scopus subject areas

  • Management of Technology and Innovation
  • Computer Science(all)

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