ABSTRACT

The main goal of the Thesis is the development of a tool which enables to make optimal decisions 
about Cost Management from the point of view of future returns and in line with the constraints and 
determining factors of the enterprise analyzed through the Conjoint Analysis technique. 
Additionally, this tool will assist and be geared towards the project or industrial product 
businesses which have fewer management resources available.

In the Theoretical Base, the main and more relevant contributions are described from the point of 
view of the planned goal in the scopes and spheres of Project Management, Management Accounting and 
Conjoint Analysis. The first one due to the fact that it falls within the scope in which the tool 
will be applied, the second one because it provides the necessary source of information for the 
decision-making process regarding cost and the third one due to the fact that it is the statistical 
tool which allows modelling the actual operating possibilities of the business.

With a view to reaching the goal, a model based on the classic Cost-Volume-Profit analysis has been 
developed, which proposes and poses an alternative representation of the organizations’ economic 
performance data. Afterwards, it tries to define which is the best individual strategy to make 
improvements in order to meet the profitability targets. With that purpose in mind, it is grounded 
on a new variable –which is one of the original contributions of the present research- named 
Economic Impedance. This variable establishes which the relative opposition or resistance to the 
progress in each variable under study is, the variables being Incomes, Variable Cost and Fixed Cost 
(I, VC & FC).

With the mixture of these elements and through the postulations presented for the model a result 
named INF is obtained, which means and involves the level of Profitability where an inflexion is 
raised, the latter meaning the point at which a change in the performance priority variable (I, VC 
or FC) is made.

                                INF =  1 - ( WRvc/WPi - EIi/EIc)

Built on this conceptual basis, a Methodology or procedure to be developed in order to implement of 
the presented model is therefore proposed. The former is intended to obtain and determine the 
Economic Impedances through a pair of possible procedures. The first one is based on the Conjoint 
Analysis and the second one is based on the quantification of the progress and its associated 
costs. By using these Impedances and the organization’s economic performance data, INF is 
calculated. Subsequently, the management efforts are planned and proposed so as to improve the 
economic performance results during the defined period. After that period, the required data are 
collected and obtained again and the model is restated, so the organization’s evolution is 
monitored and the organization’s evolution is traced across the periods in a continuous improvement 
process.

The validity of the methodological proposal is tested through several hypothesis or propositions in 
which several assessments will be undertaken: the new model of geometric representation of the 
economic variables (I, FC & VC), the Economic Impedance construct as the level of opposition or 
difficulty faced in the improvement process of these variables, the usefulness of the Conjoint 
Analysis which was employed in order to obtain them, the usefulness of the second procedure to that 
purpose, and finally, the utility of INF variable for the optimization of the organization’s 
economic performance results.

The Implementation of the model for its validation has been entirely undertaken at three different 
organizations, a factory, an installer and a construction business. Besides, partial assessments 
have been carried out at nine other organizations. The model implementation Results are collected 
and gathered so as to provide a synthetic perspective of the latter. Consequently, an in the light 
of the collected data, the validity of the proposed hypothesis is assessed and discussed checking 
that only one is refuted, the one that concerns the second method used to calculate the Impedances, 
which further supports the original idea of using the Conjoint Analysis for that purpose.

Among the conclusions drawn from the research it should highlight the discovery of 
counter-intuitive scenarios with regards to the decisions made on the optimization the business 
performance. Once the general usefulness and validity of the model have been accepted, different 
improvements are proposed in order to achieve more accurate calculation of the Impedances and to 
overcome some of the constraints of the above-mentioned calculation.