The allocation of computer resources—is pricing the answer?
Communications of the ACM
A general business-oriented language based on decision expressions
Communications of the ACM
Microeconomics and the Market for Computer Services
ACM Computing Surveys (CSUR)
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The problems of allocating costs of a computer system are discussed, and a procedure is presented to solve these problems. The concept of a Responsibility Center is presented, and cost allocation rules for the operation of the Responsibility Center are developed. The cost allocation scheme influences users of a computer facility to adjust their demands for processing to that level most beneficial to the overall organization in question. Four conditions form the basis for the development of the cost allocation formula: (1) Charges for the use of a joint facility must cover cost; (2) a user's charges are based on the incremental cost caused by the user; (3) the charge is independent of the names assigned to users or ordering of users (if some users cause the same incremental costs, then the user's charges are the same); and (4) if the user changes his requirements and as a result his incremental costs are changed, then the cost allocation is changed appropriately. The costing procedure based on the above four conditions provides a rational way to distribute costs; it allocates greater costs to the user whose alternative costs are greater. A five step planning procedure implements this cost allocation procedure.