Savings Measurement for Capital Equipment Purchasing : Challenges and Conceptual Model

Item Type Journal paper

Capital equipment purchasing (CEP) exerts a significant influence on purchasing success. Savings measurement plays an important role in evaluating CEP projects. However, savings measurement for CEP faces some special challenges. We contribute to the existing research in performance measurement and management accounting in purchasing. In this analysis, three case studies describe how companies measure savings for CEP and the challenges they face. We identify six procedure- and seven behavior-specific challenges. Procedure-specific challenges in savings measurement for CEP primarily address topics concerning components and calculation methods, while behavior-specific challenges mainly involve manipulation, trust and judgment. A discussion of the identified challenges referring to the literature on purchasing performance measurement, savings measurement, purchasing organization and behavioral management accounting leads to a preliminary conceptual CEP savings measurement model. Our formulated propositions state that savings measurement for CEP is influenced by internal and external determinants and affects CEP's performance, manipulation and trust, as well as the judgment of CEP's savings measurement results. The managerial implications of our research concern a successful design and process of savings measurement for CEP.

Authors Maucher, Daniel & Hofmann, Erik
Journal or Publication Title International Journal of Productivity and Performance Management
Language English
Keywords savings measurement, capital equipment purchasing, challenges
Subjects business studies
HSG Classification contribution to scientific community
Refereed Yes
Date 1 June 2013
Publisher Emerald
Place of Publication Bingley UK
Volume 62
Number 5
Page Range 490-513
Number of Pages 24
ISSN 1741-0401
ISSN-Digital 1758-6658
Publisher DOI 10.1108/IJPPM-10-2012-0115
Depositing User Dr. Daniel Maucher
Date Deposited 19 Apr 2013 17:33
Last Modified 17 Jun 2021 00:22


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Maucher, Daniel & Hofmann, Erik (2013) Savings Measurement for Capital Equipment Purchasing : Challenges and Conceptual Model. International Journal of Productivity and Performance Management, 62 (5). 490-513. ISSN 1741-0401

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