Using time value of money in product direct cost calculation in lean production systems

In the current conditions of the world's competitive market, producer companies have come to invest more in their different operating systems and supporting their products in order to improve their products in terms of quality, variety, flexibility and updating of manufacturing methods, so that make it possible to produce the product with the lowest price to meet the maximum level of customers' requirements. Hence, one of the main aspects in creating the competitive advantage of organizations is accurate calculation of production costs that should be increasingly considered due to economic recession conditions in the country. The Product Direct Cost (PDC) is calculated by factors such as raw material prices, labor costs and equipment in traditional accounting systems, while the time factor is not considered as an important indicator in this regard, including time value of money causes more realistic calculations of the product direct costs and the finished cost. Therefore, utilizing the tools of lean production such as Value Stream mapping (VSM) and Cost-Time Profile (CTP) the in this paper, we try to consider the effects of Time Value of Money on the product direct cost. In this regard, product direct cost is calculated with a new approach different from traditional methods in accounting systems by mapping the current state map and focusing on the cost-time profile.