What is total cost analysis logistics?

What is total cost analysis logistics?

The foundation of the integrated logistics management concept is total cost analysis, which we have defined as minimizing the cost of transportation, warehousing, inventory, order processing and information systems, and lot quantity cost, while achieving a desired customer service level[1, p. 39].

What is a logistics analysis?

Logistics analysis consists of the integration of inventory, facility location, transportation, packaging activities, and informational flow for the purpose of managing an effective physical movement of outbound and inbound goods and services in a competitive environment.

What are the principles of logistics costing?

A basic principle of logistics costing is that it identifies the different costs that result from servicing customers with particular product mixes. An effective costing system seeks to determine the total cost of achieving specific logistics objectives (outputs) by quantifying the various logistics inputs.

What are the types of logistics costing?

Logistics Costs: The 5 Main Cost Drivers During Operations

• Warehousing Costs: Incoming goods.
• Warehousing Costs: Storage.
• Fulfillment Costs: Pick & Pack.
• Shipping Costs: Delivery.
• Other Costs: Returns.

How do you calculate cost analysis?

How to calculate cost analysis

1. Determine the reason you need a cost analysis. The way you use a cost analysis can vary depending on why you need a cost analysis done. …
2. Evaluate cost. …
3. Compare to previous projects. …
4. Define all stakeholders. …
5. List the potential benefits. …
6. Subtract the cost from the outcome. …
7. Interpret your results.

What is the relationship between cost analysis in logistics management?

Cost analysis is relevant to logistics management because resources are needed to operate all major components of a logistics system (see figure 1). The components range from procurement, to warehousing, to transport and information systems; and they involve human, capital, and material inputs.