the particular LSP should alter its pricing model from Traditional Cost Accounting Method to Activity based Cost Method because the Typical Cost Accounting Method, which was applied for this particular pricing, could not thoroughly extract all
necessary overhead costs from each activity.Besides, it has never acknowledged the differences in activities required for Full-truck-load (FTL) and Milk-run transportation services as identified on the above Logistic Resources Utilization Moreover, it is not capable of reflecting a hierarchical cost structure once the resources flow from one activity
to another activity. Such hierarchical cost reflection is the most powerful data for the management to roll out Activity-based Management in respects of process analysis and improvement, cost controlling and budgeting, resource allocation and betterment as well as pricing strategy.In conclusion, Activity-based Costing method would be able to overcome the above-mentioned weaknesses the Traditional Cost Accounting method has. Furthermore, the Activity-based Cost technique is also an initial stage applicable for Activity-based Management. The management can refer to the
Activity-based Cost related information for further analysis of the process and subsequently improvement of the process. This improvement will contribute to a reduction of the costs at the end. Finally, this study would propose that the LSP
should apply Activity-based Cost technique to its pricing strategy as the method would assist the management to deliberate of what alternative pricing options are available and what the most appropriate pricing solution for its potential customer requirement and expectation. Limitation There is a limitation in this study in terms of such Annual transportation Records and other necessarily data as: - Accumulative kilometers transported, Total trip numbers, maintenance data,
etc. this study, therefore, was based on monthly information being made available in March 2007. Hence, the result may be more or less adjusted if the annual data is applied instead of the monthly data. Nevertheless, this study can be referred to in depth as Sample Activity-based Cost Model for the inland transportation cost analysis and pricing
the particular LSP should alter its pricing model from Traditional Cost Accounting Method to Activity based Cost Method because the Typical Cost Accounting Method, which was applied for this particular pricing, could not thoroughly extract allnecessary overhead costs from each activity.Besides, it has never acknowledged the differences in activities required for Full-truck-load (FTL) and Milk-run transportation services as identified on the above Logistic Resources Utilization Moreover, it is not capable of reflecting a hierarchical cost structure once the resources flow from one activityto another activity. Such hierarchical cost reflection is the most powerful data for the management to roll out Activity-based Management in respects of process analysis and improvement, cost controlling and budgeting, resource allocation and betterment as well as pricing strategy.In conclusion, Activity-based Costing method would be able to overcome the above-mentioned weaknesses the Traditional Cost Accounting method has. Furthermore, the Activity-based Cost technique is also an initial stage applicable for Activity-based Management. The management can refer to theActivity-based Cost related information for further analysis of the process and subsequently improvement of the process. This improvement will contribute to a reduction of the costs at the end. Finally, this study would propose that the LSPshould apply Activity-based Cost technique to its pricing strategy as the method would assist the management to deliberate of what alternative pricing options are available and what the most appropriate pricing solution for its potential customer requirement and expectation. Limitation There is a limitation in this study in terms of such Annual transportation Records and other necessarily data as: - Accumulative kilometers transported, Total trip numbers, maintenance data,etc. this study, therefore, was based on monthly information being made available in March 2007. Hence, the result may be more or less adjusted if the annual data is applied instead of the monthly data. Nevertheless, this study can be referred to in depth as Sample Activity-based Cost Model for the inland transportation cost analysis and pricing
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