Measuring logistics costs and performance

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Measuring logistics costsand performanceLogistics and the bottom line 83Logistics and shareholder value 88Logistics cost analysis 95The concept of total cost analysis 96Principles of logistics costing 99Customer profitability analysis 103Direct product profitability 109Cost drivers and activity- based costing 11181Chapter 12/11/04 12:04 pm Page 81This chapter:Outlines the many ways in which logistics manage-ment can impact on overall return on investment and,ultimately, shareholder value. Explains the rationale behind total cost analysis, a sys-tematic logistics -oriented cost accounting system andthe principal requirements for an effective logisticscosting system. Emphasizes the importance of customer profitabilityanalysis based upon an understanding of the cost-to-serve . Introduces the concept of direct product profitabilityand underlines the need to understand the customers logistics costs .

and performance Logistics and the bottom line 83 Logistics and shareholder value 88 Logistics cost analysis 95 The concept of total cost analysis 96 Principles of logistics costing 99 Customer profitability analysis 103 Direct product profitability 109 Cost drivers and activity-based costing 111 81 Chapter 3 LSCH_C03.QXD 12/11/04 12:04 pm Page 81.

  Performance, Based, Costing, Based costing