A Supportive Decision-Making Methodology Incorporating a Cost-Accounting System Tailored to Import Firms

Abstract

Import firms bound by long-term, fixed-price agreements are exposed to considerable risks arising from cost fluctuations over time, particularly within unstable global markets. This research seeks to design a systematic decision-support methodology that assists such firms in determining whether to accept or decline prospective delivery contracts. The proposed framework comprises two stages. The first stage involves the development of a cost-accounting system specifically aligned with import activities. This system integrates dynamic factors, including exchange rate variations, freight charges, and commodity price changes, in order to estimate both the anticipated profit and its associated standard deviation for each contract. The second stage introduces a mathematical decision-support model that applies a probability-based acceptance criterion. This criterion is established through a risk-preference survey completed by the firm’s decision-makers. The framework is demonstrated through a practical case study of a major Israeli import company (hereafter referred to as Tile-Art), which specialises in importing porcelain tiles and sanitary ware. Drawing on historical contract records, scenario simulations are conducted under different levels of forecasting precision, enabling a comparison between the proposed methodology, conventional approaches, and idealised benchmarks. The findings indicate that the suggested model substantially lowers the number of unprofitable agreements accepted by the firm, particularly when market volatility is high and contracts extend over longer periods. Overall, the evidence reveals that the tool produces more stable and dependable outcomes than models that overlook either risk preferences or cost variability. This study therefore contributes a novel and adaptable instrument for enhancing risk-conscious decision-making in import-oriented sectors.