Optimizing operational costs to improve accessibility of higher education: a novel integration of activity-based costing and Lean management

Purpose This study aims to investigate the integration of Activity-Based Costing (ABC) and Lean management in private medical universities to address rising operational costs and enhance financial sustainability. The objective was to determine how these methodologies can optimize resource allocation and improve cost efficiency. Design/methodology/approach A mixed-methods approach was used, combining quantitative analysis of cost structures through ABC with qualitative assessments of operational inefficiencies using Lean principles. Findings The results revealed that ABC effectively identifies cost drivers, enabling accurate cost allocation, while Lean management improves process efficiency by reducing waste and promoting continuous improvement. The integration of these methods led to significant cost reductions, better resource utilization and enhanced financial planning. Practical implications Challenges included resistance to change and the need for strong leadership to support the implementation process. This study concludes that combining ABC and Lean management offers a robust framework for financial sustainability and operational excellence in higher education. Originality/value This integrated approach contributes valuable insights into cost management practices, with potential applications across various educational settings.