An activity-based costing model for logistics operations of manufacturers and wholesalers

The logistics costs of industrial enterprises in a supply chain are studied. The following aspects of logistics costs are included: an ABC (Activity-Based Costing) calculation model for logistics; average logistics costs of Finnish industrial manufacturers and suppliers; the factors which influence a company's cost efficiency in logistics; and an ABC simulation model for the logistics costs in a company. The logistics costs were collected in 1997–1998 in a study entitled "Logistics of small-size deliveries", which was carried out at the Technical Research Centre of Finland. Seventeen Finnish enterprises participated in this study. A calculation model was developed and tested with the logistics costs of the participating companies. Conclusions were drawn about the factors that influence these logistics costs. After calculating the costs, order structures as well as the working methods of the companies were examined. With this information the ABC simulation model was developed to explain and simulate the change in the logistics costs of a company.