THE SEVENTH INTERNATIONAL CONFERENCE ON ICT IN OUR LIVES, 16 -18 DECEMBER 2017 64 How Kaizen Costing Information Facilitates Decision Making Process Ola Ibrahim Sultan El Dardery Department of Accounting Alexandria University olaeldardery@gmail.com Abstract – In the growing fast changing environment the existence of the right information, at the right time is a must, however some studies reported that making important decisions like merger or outsourcing are not only based on information but also on intuition, which is certainly not right. The reason for basing decisions on intuition is mostly because of the variations in information provided from different departments. The accounting department plays a very critical role in providing the right information for merger, outsourcing or even for investing in new research and development projects. Using traditional standard cost accounting to produce and provide the vital information for decision-making process will certainly contradict the actual information that could be collected by the sales or marketing departments. Therefore, updating the standards using kaizen costing system to provide a dynamic standard costing system is very important. The usage of kaizen costing to help improving any system is much simpler than investing a lot of money to develop a new system for providing the right, accurate, and efficient information for decision- making. The research aims at exploring and presenting the relation between standard costing and kaizen costing, providing the platform for using kaizen for updating standard costing and using it with simulation to help deciding simply whether to outsource, merger a new factory, or spend in the available factory to produce a firm's needs internally. The research will include first, identifying and explaining the process of placing standard costs, classifications and uses of standard costing and the criticisms toward using static standard costing. Then the following part will include the history and evolution of kaizen; definitions and classifications of kaizen costing; levels, and principals of kaizen costing. And the last part will include using kaizen costing to update standard costs to dynamic standard costs, examples of using kaizen costing in simulation events to provide information for decision making, and some cases where kaizen costing is used to provide information for making important decisions in different types of organizations. Keywords – kaizen costing; standard costing; simulation; cost systems; decision making. I. INTRODUCTION The new costing systems that are used by companies today were developed originally due to the flaws in the traditional systems; and for understanding the reasons for that evolution we must first cast the light on two very important concepts, product costs and period costs, to be able to understand why it was inaccurate to consider certain costs product costs and others period costs and how the traditional systems neglected some important product costs by considering them current expenses as their main interest was to provide periodical reports to control costs, make quantitative calculations for financial reporting purposes, while the costing systems should consider and report all costs during the product life cycle. Traditionally product costs were considered these costs attached to the inventory and recorded under the inventory account. These costs include freight charges of goods purchased, other direct costs of acquisition, labor costs, and other production costs incurred in the processing of goods up to the time of sale. As well, under ordinary circumstances general, administrative and selling expenses are not considered to be directly related to the acquisition or production of goods and therefore they are considered period costs. Conceptually these expenses are as much a cost of the product as the initial purchase price and related freight charges. However, in most cases, these costs are considered indirectly related to the immediate production process [1]. In modern cost management, costs in product life cycle can be classified in three groups as; pre-manufacturing costs (costs of the product idea or concept stage, and design and development stage), manufacturing costs (costs of the manufacturing stage), and post manufacturing costs (costs of the sales and after-sales logistic support stage). While, the traditional costing systems used to consider only the cost of the manufacturing stage as the product costs, the evolved costing systems have another perspective when considering product costs, as the manufacturing stage is no longer the only measurable cost stage. According to the product life cycle costing methodology all of the three cost groups should be considered when calculating the product costs. Therefore, the portion of research and development expenditures related with developing a product is capitalized and reflected in the intangible assets in the balance sheet, and the amortization will