IMPLEMENTING ACTIVITY-BASED COSTING (ABC) IN LOGISTICS

Activity-based costing (ABC) represents a relatively recent phenomenon within logistics management practice. Many firms have explored ABC as a means to more accurately trace overhead costs to specific products and customers. Initial ABC systems have primarily focused on manufacturing, and only a limited number of leading-edge firms have attempted to implement ABC for assigning logistics costs. ABC appears ideally suited for logistics management because of the wide diversity in how products or customers consume logistics resources. This article discusses how ABC assigns overhead costs and presents the results of an exploratory study examining ABC implementation specifically within logistics.