This time the cost cake is transformed into two

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This time, the cost cake is transformed into two dimensions thus allowing three comparative cost studies: Fixed vs Variable Cost: Fixed cost is the cost that will happen regularly regardless if the organization has any business are not. Variable cost will only happen if there is an activity within the fixed cost. Direct vs Indirect Cost : Direct cost will be tied to specific products. Indirect cost on the other hand will be costs that do not fall under direct cost and cannot be allocated directly to a given product. It is also known as overhead costs.
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How Much Is The Cost of Product Logistics? (cont.) (iii) Engineered vs Discretionary : Engineered costs have a defined input-output relationship. For instance, if it takes three hours to unload a container, then we have a clear output benefit of three hours to unload a container. Discretionary cost does not have a defined input-output relationship. For instance, the cost of general workers to cut grass is clear, but we do not have a quantifiable benefit of the grass being cut in relation to logistics costs.
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How Much Is The Cost of Product Logistics? (cont.) Establishing a Cost Benefit Analysis (a) The overall approach: This approach takes all factors into consideration, including psychology, marketing and others. The benefit of the project must outweigh the cost to proceed.
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How Much Is The Cost of Product Logistics?
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  • Spring '17
  • Dr Haslinda

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