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Costing models of service products: a case study in the automotive industry
University West, Department of Economics and IT, Division of Business Administration.
University West, Department of Economics and IT, Division of Business Administration.
2016 (English)Independent thesis Basic level (degree of Bachelor), 10 credits / 15 HE creditsStudent thesis
Abstract [en]

Companies have recently started to add services on their products and this changes the models of how you will be able to calculate cost. The traditional models they are using now are not fully applicable on service products if there is not an understanding of the resources required from production to delivery. Without a functioning costing model, it is difficult to evaluate the service product profitability because of unreliable calculations. By studying four selected companies in the automotive industry, this study aims to show how the practice of costing service products is performed. This means defining service products and investigating their cost calculations. The four selected companies in the automotive industry that we studied consist of vehicle manufacturers and a software developer. We have made a qualitative study and conducted ten interviews in the four companies. The respondents had great knowledge in their area of expertise and were helpful in the interview process. They gave us well-formulated answers about their service products and how they are calculating the costs. It is important to have a definition of service products in the company to be able to apply a costing model. We have therefore used research discussing the characteristics of service products. The literature also discusses available costing models but the issue with service products are that they are relatively new and there is not much research on costing models for service products. Earlier research talks about various costing models and their application on different types of offerings. The empirical result shows that three of the companies have problems getting an accurate costing of their service products while the fourth company have a well functioning costing model for their service products. A lack of knowledge and guidance on how to calculate the cost of service products have resulted in difficulties of evaluating the offerings. The fourth company has more knowledge in the costing of service products and is therefore managing it far better with their costing model.

Place, publisher, year, edition, pages
2016. , 32 p.
Keyword [en]
automotive industry, service products, costing models
National Category
Business Administration
URN: urn:nbn:se:hv:diva-9636Local ID: EXC504OAI: diva2:951238
Subject / course
Business administration
Educational program
Available from: 2016-08-08 Created: 2016-08-08 Last updated: 2016-08-08Bibliographically approved

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