Supply Chain Costing - A Conceptual Framework

Within Supply Chain Management, the reduction of costs is a frequently cited objective. Yet, no concepts have been presented so far, that allow assessing the total costs in a supply chain. This paper provides a framework for supply chain costing in three steps. First, the product-relationship-matrix offers a systematic approach to decision in supply chain management. Next, three cost levels are distinguished to allow a separation of costs that can be influenced within a single company — single and activity-based costs — and within the supply chain — transaction costs. Taken together, the three dimensions product, relationships and costs form the conceptual framework for supply chain costing.

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