September 2010
Intermediate to advanced
288 pages
10h 16m
English
Content preview from Logistics and Supply Chain Management, 4th Edition
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MEASURIN G LOGISTICS COSTS AND P ERFORMANCE
77
In this case a gross contribution of £70,000 becomes a net contribution of £56,400
as soon as the costs unique to this customer are taken into account. If the anal-
ysis were to be extended by attempting to allocate overheads (a step not to be
advised because of the problems usually associated with such allocation), what
might at first seem to be a profitable customer could be deemed to be the reverse.
However, as long as the net contribution is positive and there is no ‘opportunity
cost’ in servicing that customer the company would be better off with the business
than without it.
The value ...
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