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INTRODUCTION TO MECHANICS
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Logistics management is based on a floworiented concept with the objective of integrating resources across the supply chain which extends from suppliers to final customers, it is desirable to have a means to asses the costs and performance of the supply chain.
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Logistic costs are created by logistics activities such as customer service, transportation, ware housing, order processing and information, lot quantity and inventory carrying.
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It is a techniques that has been widely accepted in retain industry as an application of cost analysis.
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It is somewhat similar to customer profitability analysis
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This cost is often termed as the owernship”
“total
cost of
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Firstly multiply the unit sales volume by the profit margin of the product.
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This will give you overall profit for the product.
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Then divide the profit by the shelf space it uses.
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Rs. 2000/- divided by 100cm, which equals a contribution of rs. 20/-. Then direct product profitability is 20/- per cm.
