Activity-Based Management (ABM) is a management approach that uses information from Activity-Based Costing (ABC) to improve business performance.

Simple Meaning:

ABM focuses on managing and improving business activities to reduce costs and increase efficiency.

Main Objectives:

Identify unnecessary activities

Reduce non-value-adding work

Improve productivity

Control costs

Example:

If ABC shows that frequent machine setups increase costs, management may reduce the number of setups to save money.

In short, Activity-Based Management uses cost information to make better business decisions and improve operations.