Logistics and Supply Chain Management, 4th Edition

LOGISTIC S & SUPPLY CHAIN MANAGEMENT

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mission costing is the reverse of traditional techniques: under this scheme a func-

tional budget is determined now by the demands of the missions it serves. Thus in

Figure 3.9 the cost per mission is identified horizontally and from this the functional

budgets may be determined by summing vertically.

Given that the logic of mission costing is sound, how might it be made to work

in practice? This approach requires firstly that the activity centres associated with a

particular distribution mission be identified, e.g. transport, warehousing, inventory,

etc., and secondly that the incremental costs for each activity centre incurred as

a result of undertaking that mission must be isolated. Incremental ...