Understanding Cost Classifications

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Questions and Answers

What type of cost reflects the value of benefits forgone by utilizing resources for one product over another?

Shadow price

Economic cost (correct)

Accounting cost

Monetary cost

Which of the following costs does NOT vary with the output provided in the short run?

Variable costs

Opportunity costs

Shadow prices

Fixed costs (correct)

What is the primary characteristic of fixed costs in logistics?

They increase with production volume. (correct)

They are incurred only in the long term. (correct)

They do not vary with output in the short term. (correct)

They are always lower than variable costs.

Which of the following is considered a main category of costs in logistics?

Costs related to personnel Signup and view all the answers

What are 'shadow prices' best defined as?

Prices applied to goods whose true value is misrepresented. Signup and view all the answers

In the context of costs associated with logistics, which type describes the costs that vary based on output volume?

Variable costs Signup and view all the answers

Which type of cost is typically associated with providing a service or product at a specific time?

Accounting cost Signup and view all the answers

Which of the following best describes opportunity costs in logistics?

The cost incurred when choosing one alternative over another. Signup and view all the answers

What factors need to be considered when determining the frequency of trips in a logistics system?

Carrying capacity of vehicles and reorder frequency Signup and view all the answers

Which parameter does NOT directly affect the total days required for logistics operations?

Dimensions of packaging Signup and view all the answers

In the hypothetical scenario provided, what is the total volume of pharmaceuticals to be distributed quarterly?

30 cubic meters Signup and view all the answers

What is an essential logistical aspect to account for while planning delivery routes?

The relative location of delivery points Signup and view all the answers

When analyzing delivery distances, which additional variable is NOT typically considered?

Nature of the products delivered Signup and view all the answers

Which of the following is most likely to affect a delivery's total kilometers when planning a logistics operation?

Distance between delivery points Signup and view all the answers

What determines the maximum operational hours for drivers in logistics?

Legal regulations regarding driver work hours Signup and view all the answers

To ensure effective inventory management, which system is commonly compared in logistics practices?

Types of inventory control systems like pull versus push Signup and view all the answers

How many vehicle-days per year are available for transport?

228 vehicle-days Signup and view all the answers

What is the total number of kilometers the truck covers to complete distribution in one cycle?

5,850 kilometers Signup and view all the answers

Given the speed of 40 km/h, how many hours does it take for the truck to cover the required distance?

146.25 hours Signup and view all the answers

How many days are required to complete the distribution of pharmaceuticals in one cycle?

73.2 days Signup and view all the answers

How many trips does the truck need to make to deliver 30 cubic meters of pharmaceuticals?

13 trips Signup and view all the answers

Considering all operational factors, is one truck sufficient for the distribution needs?

Yes, one truck is sufficient Signup and view all the answers

What is the average number of working weeks available for the driver in a year?

44 weeks Signup and view all the answers

What is the maximum distance that can be covered in a single trip of the truck?

450 kilometers Signup and view all the answers

What is the total fixed cost associated with pharmaceuticals distribution?

EUR 4,150 Signup and view all the answers

What is included in the variable costs associated with pharmaceuticals distribution?

Vehicle Maintenance and Fuel Expenses Signup and view all the answers

How are total pharmaceuticals distribution costs calculated?

Sum of fixed costs and variable costs Signup and view all the answers

What is the cost per vehicle-day for pharmaceuticals distribution?

EUR 56.08 Signup and view all the answers

Which of the following contributes to total variable costs?

Fuel expenses and vehicle maintenance Signup and view all the answers

What is the total variable cost associated with pharmaceuticals distribution?

EUR 6,318 Signup and view all the answers

Which costs are classified as fixed and associated with pharmaceutical distribution?

Vehicle Amortization and Insurance Signup and view all the answers

What is the total annual cost of the vehicle related to pharmaceuticals distribution derived from the content?

EUR 12,787 Signup and view all the answers

What is the primary purpose of a freight exchange?

To connect shippers with carriers for transportation opportunities Signup and view all the answers

Which task is NOT listed as a responsibility of freight exchanges?

Conducting background checks on shippers and carriers Signup and view all the answers

Which of the following platforms is considered an example of a freight exchange?

Euroloads.net Signup and view all the answers

What advantage do freight exchanges offer to the logistics process?

Reduction of inefficiencies in supply chain management Signup and view all the answers

In distribution, what factor can affect the eligibility for different allowance rates?

The role of the personnel involved Signup and view all the answers

What is a key feature of the platform provided by freight exchanges?

A centralized location for shippers to post available loads Signup and view all the answers

Which of the following is a benefit of using a freight exchange for carriers?

Access to a wider range of freight opportunities Signup and view all the answers

How do freight exchanges typically facilitate transactions?

By streamlining communication between shippers and carriers Signup and view all the answers

Study Notes

Cost Definition

Cost is the value of something expended to obtain a benefit.
Cost is also the quantity of one thing that is exchanged for a service or a product.
Costs can be expressed as monetary, economic, accounting, or shadow prices.

Cost Classifications

Monetary cost: Expenses incurred for an input or to provide a product or service, at a given time.
Economic cost: The value of benefits forgone by using resources to provide alternate products or services.
Accounting cost: The real value of a product or service at a given time; the cost may actually not be incurred..
Shadow price: Applied to goods and services whose true value is not the same as listed.

Cost Categories

Personnel: Costs related to people and their time.
Capital: Costs of equipment or capital (machines).
Materials and Supplies: Costs of resources that are frequently replenished.

Logistics Cost Analysis

Fixed cost: Costs that do not vary with quantity or volume of output provided in the short run (typically, one year). These costs usually vary with time.
Variable cost: Costs that vary with changes in quantity or output volume.

Transport Cost Drivers

Distance: The total kilometers and days to cover the route.
Order Level/Volume: The number of units of a product ordered or delivered.
Frequency: The number of deliveries made.
Delivery Route: The type of links between delivery points and the type of delivery mechanism used.
Type of Product: The type of product ordered/delivered and its dimensions.
Inventory Control System: The type of inventory control system used (e.g., pull vs. push, minmax levels set by product or in general)

Freight Exchange

An online marketplace where shippers and carriers can connect to find freight opportunities.
Shippers can publish available loads and carriers can bid on them.
Freight exchanges provide a centralized location for shippers to find carriers and carriers to find loads.
Designed to simplify logistics processes, reduce transportation costs, and improve supply chain efficiency.

Freight Exchange Tasks

Providing a platform for shippers and carriers to connect.
Offering real-time information on available loads and carriers.
Providing tools to help shippers and carriers manage their operations.
Streamlining communication between shippers and carriers.
Facilitating transactions between shippers and carriers.

Freight Exchange Platforms: Examples

123 Cargo
CargoCore
Euro Freight Exchange
Euroloads.net
Express-online
Haulage Exchange

Measuring Costs Associated with Vehicle-Days

Determined by total vehicle-related costs divided by the number of vehicle days.
Information is typically available for a fleet of vehicles but can be calculated per vehicle.
Costs are quoted on an annual basis.
Different personnel involved in distribution may be eligible for different allowance rates, which should be considered.

Further Study

October 7, 2024 @ 18:15
Kalnciema street 6 - 223.
Topic: Global Purchasing Strategy in Logistics.
Independent work I

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Description

This quiz explores the definitions and classifications of costs, including monetary, economic, accounting, and shadow prices. You'll learn about various cost categories such as personnel, capital, and materials, enhancing your understanding of logistics cost analysis.