Difference between revisions of "CO12"

Latest revision as of 14:48, 10 June 2017

Distribution Costs measures a company’s expenses related to the order fulfillment of products and services to the customer. Example costs include: Transportation cost, warehousing cost, handling costs, import/export duties, order management cost, depreciation/amortization and other costs. Distribution Cost Ratio compares Distribution Costs to total sales revenue.

Where

• Order Management Costs = Total annual order management costs
• Fulfillment Costs = Total annual logistics, transportation and warehousing costs
• Total Revenue = Total annual supply chain revenue

Unit of measure: %

Importance

A lower percentage indicates better performance. For benchmarking purposes this metric is measured annually. For scorecards, dashboards and cockpits these a typically a rolling number of months.

Notes

For Reverse Logistics supply chains these costs include the costs to ship the product or asset to repair between locations. The costs to source replacement parts and the labor costs to repair the product or asset are part of Cost of Goods Sold. t:OM Cross-Docking Statement of Comprehensive Income

3.00

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