Analyzing Cost-to-Serve Quantification Methodologies in a Wholesale Industry Setting Conference Paper uri icon

abstract

  • The major business function of a wholesale company is to provide supply chain services to its customers. Such services include inventory management, solution based services, credit terms, and transportation & logistics services. Unlike its manufacturing counterparts, wholesale companies are still based on rudimentary legacy systems of pricing that do not have a proper way of accounting for different types of costs-to serve (CTS). As a result, many companies struggle to become cost-competitive. This paper investigates two of the most common CTS methodologies (that is, activity based costing and surrogate method) currently described in literature. Both methodologies are examined by employing data from a real world wholesale distribution company. Finally, based on the findings from the case analysis, the paper recommends few optimal strategies for CTS which can be applicable to the wholesale distribution industry beyond the case company.

published proceedings

  • Proceedings of the International Annual Conference of the American Society for Engineering Management.

author list (cited authors)

  • May, G. L., & Nepal, B.

complete list of authors

  • May, GL||Nepal, B

publication date

  • January 2017