Date of this version

Fall 9-2012

Document Type



Cost behavior, Strategic cost management, Sticky costs, Resource procurement, Flexible resources, Committed resources


Integral to strategic cost management is the choice of procuring flexible versus committed resources conditioned on demand uncertainty. Prior research shows that costs respond less to decreases than increases in sales activity when firms invest in committed resources. We analyze asymmetry in cost behavior to investigate how resource procurement decisions between flexible and committed resources are related to precedent and antecedent information about demand uncertainty. We find that the asymmetry of cost responsiveness increases with historical sales growth and with the firm's market-to-book ratio, and decreases with historical sales volatility. We find similar results for firm-specific deviations of sales growth, sales volatility and the market-to-book ratio from the industry averages. These results illustrate how managers might combine precedent and antecedent information in formulating a resource procurement plan as a means of strategic cost management.

Published in

Journal of Business Research

Citation/Other Information

Anderson M., Asdemir, O., and Tripathy A., “Use of precedent and antecedent information in Strategic Cost Management” Journal of Business Research. Available online 13 September 2012, ISSN 0148-2963, 10.1016/j.jbusres.2012.08.021.

Included in

Accounting Commons