Evaluation and diagnostics of costs for company’s logistics activity by cost centers and processes of logistics management
Journal Title: Економіка: реалії часу - Year 2016, Vol 4, Issue 26
Abstract
The article improves a method for evaluation and diagnostics of costs for company’s logistics activity. Unlike existing methods, the author’s method is based on combination of functional and object-oriented approaches and consists in indication of key centers of cost arising (legal, transport, logistics departments and departments of warehouses and international economic relations), taking into account processes of logistics management. The suggested method enables to evaluate and diagnose such costs as well as to manage them generally in strategic and tactic dimensions and to develop measures for optimization and monitoring costs. The improved method enables to evaluate an absolute amount of costs for logistics activity, to determine a way for establishment of a substantiated amount of costs (for instance, in the structure of general logistics costs of a company or in the structure of total costs of products), and to enhance composition of these costs or management processes. Moreover, periodical analyzing the mentioned cost composition by processes of logistics management or by centers of cost arising enables to determine possible reserves of the decrease of these costs and to develop certain mechanisms for optimization and improvement of cost composition. One more advantage of the improved method consists in an opportunity of integral evaluation that enables to consider logistics operations of an economic entity as a single process, which is implemented as a link of production and company’s economic activity. The improved method for evaluation and diagnostics of costs for company’s logistics activity by cost centers and processes of logistics management is of practical importance in a case of thorough analyzing obtained results and the ability to use them in managing business-processes of an economic entity in general. For example, the calculated figures may be analyzed in the dynamics or may be compared with normative values. In addition, it is important to detect reasons of deviations, to be able to indicate tendencies, and to prognosticate future prospects. Under some conditions, companies may make decisions regarding reallocation of such costs between cost centers. In this context, it is important to emphasize the priority of diagnostics of company’s logistics activity by cost centers and processes of logistics management in close connection with development of an economic entity in general and separate business processes in particular. Thus, executives may avoid cases of inconsistency between management of such costs and production and economic activity of companies. Prospects of further researches should consist in identification of conditions for successful application of the improved method for evaluation and diagnostics of costs for company’s logistics activity.
Authors and Affiliations
Olha Telishevska
Keywords
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