From the course: Implementing Supply Chain Management
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Calculate total costs
From the course: Implementing Supply Chain Management
Calculate total costs
- Saving money is great, but in a supply chain, cutting costs in one place can increase costs in another. So we need to take a broader view to make sure we're having a positive impact on the bottom line. We get that broad impact by calculating the total cost to serve. We'll walk through an example to show you how you can use a spreadsheet to calculate the total cost to serve for a product. If you have access to the Exercise Files, you can download the spreadsheet and follow along. Let's say our company buys 1000 widgets per week from a supplier, and we operate for 50 weeks out of the year. We'll analyze the total cost for these widgets by looking at three categories, purchasing costs, transportation costs, and inventory costs. Let's say our company buys 1000 widgets per week from a supplier, and we operate for 50 weeks out of the year. We'll analyze the total cost for these widgets by looking at three categories,…
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