供应链管理16
- 1. CHAPTER 16 Financial Control of Logistics Performance
- 2. Questions Accounting System Must be Capable of AnsweringHow do logistics costs affect contribution by product, by territory, by customer, and by salesperson? What are the costs associated with providing additional levels of customer service? What trade-offs are necessary, and what are the incremental benefits or losses? What is the optimal amount of inventory? How sensitive is the inventory level to changes in warehousing patterns or to changes in customer service levels? How much does it cost to hold inventory? What mix of transport modes/carriers should be used?a
- 3. Questions Accounting System Must be Capable of Answering (cont.)How many field warehouses should be used and where should they be located? How many production setups are required? Which plants will be used to produce each product? What are the optimum manufacturing plant capacities based on alternative product mixes and volumes? What product packaging alternatives should be used? To what extent should the order processing system be automated? What distribution channels should be used?b16-2 b
- 4. Is costdependent onunit volume?Isresourcededicated to aspecificproductline?Place in contributionpoolChargeApplicableSegmentChargeApplicableSegmentVariableNon-VariableIndirectNONOYESYESAssigning Costs To Segments 16-3
- 5. Contribution Approach with a Charge For Assets EmployedNet sales Cost of goods sold (variable manufacturing costs) Manufacturing contribution Variable marketing and logistics costs Sales commissions Transportation Warehousing (handling in and out) Order processing Charge for investment in accounts receivable Segment contribution margin Assignable nonvariable costs Salaries Segment-related advertising Bad debts Inventory carrying costs Segment controllable margin Charge for assets used by segment Net segment marginTotal Company Segment A Segment B Segment C ____________ ________ ________ ________ ____________ ________ ________ ________ ____________ ________ ________ ________ ____________ ________ ________ ________ ____________ ________ ________ ________ ____________ ________ ________ ________ ____________ ________ ________ ________ ____________ ________ ________ ________ 16-4
- 6. Profitability by Type Of Account: A Contribution ApproachSales Less discounts, returns and allowancesNet Sales Cost of goods sold (variable manufacturing costs)Manufacturing contribution Variable selling and distribution costs: Sales commissions Transportation costs Warehouse handling Order-processing costs Charge for investment in accounts receivableContribution margin Assignable nonvariable costs (costs incurred specifically for the segment during the period): Sales promotion and slotting allowances Advertising Bad debts Display racks Inventory carrying costsSegment controllable marginSegment controllable margin-to-sales ratioNote: This approach could be modified to include a charge for the assets employed by each of the segments, as well as a deduction for the change in market value of these assets. The result would be referred to as the net segment margin (residual income).$42,5002,50040,00020,00020,0008002,50060040070015,0001,2505003002001,250$11,50027.1%$6,2502506,0002,5003,50012031015060202,84060---------150$2,63042.1%$10,50050010,0004,8005,200200225---35504,690620---------200$3,87036.9%$19,7501,75018,0009,2008,8003601,7954502806155,300400500300200800$3,10015.7%$6,000---------6,0003,5002,500120170---25152,170170---------100$1,90031.7%TotalCompanyDepartmentStoresGroceryChainsDrugStoresDiscountStoresType of Account16-5
- 7. Profitability By Type of Account: A Contribution Approach ($000)Note: This approach could be modified to include a charge for the assets employed by each of the segments, as well as a deduction for the change in market value of these assets. The result would be referred to as the net segment margin (residual income).Sales Less discounts, returns and allowancesNet Sales Cost of goods sold (variable manufacturing costs)Manufacturing contribution Variable selling and distribution costs: Sales commissions Transportation costs Warehouse handling Order-processing costs Charge for investment in accounts receivableContribution margin Assignable nonvariable costs (costs incurred specifically for the segment during the period): Sales promotion and slotting allowances Advertising Bad debts Display racks Inventory carrying costsSegment controllable marginSegment controllable margin-to-sales ratio$19,7501,75018,0009,2008,8003601,7954502806155,300400500300200800$3,10015.7%Drug StoreChannelType of Account$10,0001,0009,0004,5004,5001801,4753502005601,735200500300200620($85)---IndependentPharmacies$5,5005005,0002,6002,40010020010055351,910110---------100$1,70030.9%RegionalDrug Chains$4,2502504,0002,1001,90080120---25201,65590---------80$1,48534.9%NationalDrug Chains16-6
- 8. Shortcomings for Corporate Profitability Reports1. Full manufactured costs (which sometimes include a profit for the plant) were used in calculating costs. 2. Operating costs such as development, selling, and administration were fully allocated to products often on a percentage-of-sales basis. 3. Costs such as transportation, warehousing, sales commissions, and sales promotions were not reported as separate line items. 4. When marketing and logistics costs were identified explicitly as expenses, they usually were allocated to products on a percentage-of-sales basis.Copyright © 2001 by The McGraw-Hill Companies, Inc. All rights reserved. a16-7 a
- 9. 5. Inconsistencies in terminology were common. When executives referred to contribution margins, often the numbers used were actually manufacturing contribution. 6. Opportunity costs such as inventory carrying costs, a charge of accounts receivable, and a charge for other assets employed did not appear on profitability reports. 7. Reports that covered more than one year were not adjusted for inflation. 8. Reports were not adjusted to reflect replacement costs.Shortcomings for Corporate Profitability Reports (cont.)b16-7 b
- 10. Profitability By Type Of Account: A Full Cost Approach ($000)Net Sales Cost of goods sold (Full manufacturing costs)Manufacturing Margin Less Expenses: Sales commissions Transportation costs ($/case) Warehouse handling ($/cu. ft) Order-processing costs ($/order) Sales promotion (% of sales) Advertising (% of sales) Bad debts (% of sales) General Overhead and Administrative Expense (% of sales)Net Profit (before taxes)Profit-to-sales ratio$40,00025,00015,0008002,5006004001,2505003006,150$2,5006.3%TotalCompanyType of AccountDrugStoresGroceryChainsDept.StoresDiscountStores$6,0003,7502,25012037590301877545922$4066.8%$10,0006,2503,75020062515050312125751,538$6756.8%$18,00011,2506,7503601,1252703005632251352,768$1,0045.6%$6,0003,7502,25012037590201887545922$4156.9%16-8
- 11. Controlling Logistics ActivitiesControl over logistics costs can be accomplished byStandard costsBudgetsProductivity standardsStatistical process control16-9
- 12. A Modular Database System for Reporting Cost and Revenue FlowsMarketing segment analysisFunctional cost reportsChargesCreditAccounts for external reportingNon-financial data Source documentsStandard costsActual costsRevenuesExternal reportsModular databaseRevenue flow Actual recorded cost flow Standard estimated cost applied to actual activity16-10
- 13. Report Generating Capabilities of the Modular BaseGeographical profitabilityCost by cost center and functionExternal Financial statementsRevenue and expense itemsProduct profitabilityCustomer profitabilityChannel profitabilityModular databasedSalesperson performanceCoded16-11
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