Activity-Based Costing for Process Improvements

Taehoon Kim1 & Yong-Woo Kim2

1Assistant Professor, School of Architecture, Chosun Univ., Seosuk-dong, Dong-gu, Gwangju 501-759, Republic of Korea. +82-62-230-7145,
2Associate Professor, Department of Construction Management, College of Built Environments, Univ. of Washington, Seattle, WA 98195, United States (corresponding author),


Current construction industry requires effective process improvement to enhance the productivity and managerial capability. However, construction projects are found to have a limited number of tools for process management on construction sites. Activity-based costing (ABC) technique can provide insightful information on areas for process improvement to minimize waste or non-value-adding activities. However, the ABC has the limitations in reflecting complicated and interactive nature of construction processes. This paper explores how ABC can be practically used for construction process improvement with the support of discrete event simulation (DES) technique. Activity hierarchy is presented as a way to allow sustainable activity cost tracking. The proposed approach can contribute to facilitating easy and practical process control on a basis of more accurate cost information


Activity-based costing, discrete event simulation, process improvement.



Kim, T. & Kim, Y. 2016, 'Activity-Based Costing for Process Improvements' In:, 24th Annual Conference of the International Group for Lean Construction. Boston, USA, 20-22 Jul 2016.

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