Applying ABC System Rail Agenty Rta Dubai

Applying ABC system Rail Agenty RTA Dubai

The aim of this project is to apply the Activity-Based Costing (ABC) methodology in Rail Agency (RA) at Road and Transport Authority (RTA) in Dubai in the process of accounting for costs. Before applying the ABC model to the RA at RTA there is provision of background information about RA and RTA. The project proceeds by explaining what ABC system is and its importance. After the explanation, the system is applied to RA at RT beginning with the identification of activities up to the last step, which is calculating the total costs of offering services at RA. Last the project concludes by analysis and discussion, a section that handles the relevance of ABC system to RA.

Introduction

The aim of this paper is to apply the Activity-Based Costing (ABC) system in the Rail Agency (RA) at Road and Transport Authority (RTA) in Dubai to help the RA to manage, reduce, and control costs in the move to handle the increasing competition from other modes of transportation. Minimizing the costs of operations and maximizing profit is the goal of any business organization. It is also the goal of non-profitable organization to reduce their cost of operations. This is because minimizing operation expenses helps a business organization or a corporate to avoid the threat of failure. Competing business organizations or agencies require applying methods that can help them reduce their expenses, and have the ability to obtain profits during stiff competitions.

Competition also exists among different transportation agencies like any other agency. The different agencies in the transportation sector include the agencies handling road transport, rail transport, and marine transport. These agencies of transports have caused stiff competition among themselves for along time. They compete in terms of offering better services and ensuring that there is retention of customer satisfaction. They have to achieve customer satisfaction by providing quality services. Quality services comes about when cooperate can deliver services to their customers on time, at reasonable prices, ensuring their safety, and showing flexibility. However, it is not easy to meet these criteria without using an organizations or agencies funds. In using the extra funds to achieve customer satisfaction, it is vital for the business organization to ensure that the costs of operations are reasonable for easier profitability, and reduce the risk of failure.

Rail transport is one of the vital modes of transport in the transportation sector in Dubai. Through this transport it is easier to transport heavy goods, reduce road congestion, and connect the buyers and sellers among other benefits. Therefore, it is wise to ensure that this mode of transport is safe for passengers to continue enjoying the benefits of this mode of transport in Dubai.

1.1. Rail Agency at Road and Transport Authority

Road and transport Authority (RTA) has the responsibility of managing transport activities at Dubai in United Arab Emirates (U.A.E) (Road and Transport Authority, 2012). The RTA has a mission to offer solutions concerning traffic needs in Dubai. RTA has the duty to ensure that Dubai achieves its' vision by providing an effective transport system, and other services that relates to road transport. This includes providing transport buses, taxis, parking space, rail services and marine services. It is important to understand that RTA gears its' responsibilities toward ensuring that Dubai transport does not affects its' developments negatively (Krane, 2009).

The aim of RTA to provide a solution to transportation or traffic challenges at Dubai is to some extent dependent on the rail transport. The rail agency under RTA is vital in the control of the Dubai metro, which is responsible for the rail transport in Dubai. The rail agencies is aiming at providing better transportation services in the rail sector by providing modern rail network, and provide the best state transport. Currently, the agency offers its' services on two lines. The lines are the red and green lines. These lines appear underground in the city, and in other areas this lines are elevated with good air conditioning and other arts design to make it safe for passengers. The Dubai metro provides transportation to many travelers. For example, during the first week after the launch, there was transportation of more than 280, 000 passengers (Road and Transport Authority, 2012).