Detailed cost modelling: a case study in warehouse logistics
International Journal of Physical Distribution & Logistics Management
ISSN: 0960-0035
Article publication date: 24 April 2007
Abstract
Purpose
The purpose of this paper is to examine the applicability of different drivers for assigning activity costs to products in warehouse logistics environment.
Design/methodology/approach
An action research case study in the warehouse logistics of an electronics wholesaler. Data were collected from a single activity which was analysed in depth.
Findings
The study illustrates that there may be significant variation in activity costs that cannot be traced with any single transaction‐based driver. Automatic data collection methods can be used to support cost accounting in such a situation. It was clearly demonstrated that in certain environments it is possible to significantly increase the accuracy and versatility of accounting by measuring the actual durations together with other variables.
Research limitations/implications
The results are derived from a single company and activity.
Practical implications
Gives accountants in environments where data is rich and plentiful examples of methods for analysing the data for obtaining a deeper understanding of the cost behaviour of activities and products.
Originality/value
Complements the discussion on activity cost drivers and logistics costing.
Keywords
Citation
Varila, M., Seppänen, M. and Suomala, P. (2007), "Detailed cost modelling: a case study in warehouse logistics", International Journal of Physical Distribution & Logistics Management, Vol. 37 No. 3, pp. 184-200. https://doi.org/10.1108/09600030710742416
Publisher
:Emerald Group Publishing Limited
Copyright © 2007, Emerald Group Publishing Limited