Title: The moderating effect of advanced manufacturing technologies mechanisms on the relationship between production complexity and costing system design: evidence from Saudi Arabia

Authors: Abdulrahman Aljabr; Badr Banhmeid

Addresses: School of Business, King Faisal University, P.O. Box 400, 31982, Al-Hasaa, Saudi Arabia ' Faculty of Economics and Administration, King Abdulaziz University, P.O. Box 80201, 21589, Jeddah, Saudi Arabia

Abstract: Operating with optimal costing system design (CSD) that suits the surrounding production and business context is essential to achieve optimal performance. Thus, this research drew on contingency theory and aimed to test the moderating role of advanced manufacturing technologies (AMTs) mechanisms on the association between production complexity (PC) and CSD, with the aim of extending the prior research on this issue by utilising more comprehensive PC and CSD measures and incorporating additional factors that represent the underlying AMT effect. By exploiting quantitative data from Saudi Arabia, the findings of this research show that AMT and the mechanisms of its effect, as indicated by the level of manufacturing flexibility (MF) and reduction in batch- and product-level costs (RBPCs), do not moderate the relationship between PC and CSC, which is contrary to expectations. This research advances prior findings on the impact of PC on optimal CSD, considering the adopted manufacturing technologies.

Keywords: advanced manufacturing technologies; AMTs; activity-based costing; ABC; batch- and product-level costs; costing system complexity; CSC; costing system design; CSD; manufacturing flexibility; production complexity; Saudi Arabia.

DOI: 10.1504/IJSOM.2025.148828

International Journal of Services and Operations Management, 2025 Vol.52 No.1, pp.25 - 40

Received: 01 Jul 2023
Accepted: 20 Jul 2023
Published online: 29 Sep 2025 *

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