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.
Calcalation
| Distribution Costs |
| = | Order Management Costs |
| + | Fulfillment Costs |
where:
Unit of Measure: Currency
Benchmarking
Distribution Costs Ratio compares Distribution Costs to total sales revenue for benchmarking purposes.
| Distribution Costs Ratio |
| = |
| Distribution Costs |
× 100 % |
| Revenue |
|
where:
- Distribution Costs = Total annual order management 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.
Discuss Contract Custom Solution
Cross-Docking
Statement of Comprehensive Income
Community Importance
Rating:
Term(s)
| ID | Name | Clear | x | | XDK | Cross-Docking | | XDK |
| IFRS | International Financial Reporting Standards | | IFRS |
| CSCI | Statement of Comprehensive Income | | CSCI |
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