Financial Controls of Logistics Performance Assignment

Financial Controls of Logistics Performance - Assignment Example8. Why is it difficult to obtain logistics equal info in many firms? Logistics embodys are essential factors that influence the market competitiveness of firms and countries. diminution logistic exists is bound to reduce the total personifys of both goods and services. However, the attainment of logistics cost entropy is relatively difficult for most companies. This is primarily as a consequence of the lack of sufficient logistics cost information as a result of poor logistics management activities. Firstly, there is no unified translation of logistics cost (Bokor, 2012). The lack of uniformity with regards to defining logistics costs, as well as methods used in the computation of logistics cost affects the acquisition of logistics selective information. Since the definition of logistics cost is incoherent, it is, therefore, tricky to compare the findings of logistics costs. In addition, it is difficult to acquir e logistics data because the cost component is mostly not standardized. The limited standardization of cost measurement deters the standardized acceptability of logistics data. In addition, difficulties emerge due to the hardships encountered in the collection of transparent information. On a micro level, a vast majority of firms publish cost data to serve their accounting needs, as well as external requirements such as government taxation (Pohlen, Klammer & Cokins, 2009). These produce an inhibitor to cost transparency throughout the data collection process. The accounting needs of firms often inhibit cost transparency, resulting in deficient information, disparities in the allotment of costs such as overhead costs and a narrow outlook of the concept of cost management. 9. Explain the four methods that can be used for conditionling logistics activities. What are the advantages and disadvantages of each? 1. Standard cost Standards are utilized as an integral part of flexible budg eting processes. One of the greatest advantages of standard cost is the provision of the most powerful management controls. Standard costs are typically ascertained from industrial engineering studies in which logisticians assess work activities and operations in order to realize effective and practical(a) operating rates for different tasks. Another major advantage of standard costs is that they can be created for diverse logistics functions, including warehousing and transportation, as well as other logistical components and levels such as mortal work activities and logistics sub-functions (Voortman, 2004). However, standard costs have the disadvantage of inapplicability in case of change magnitude costs of doing business, for instance, increased transportation. 2. Budgets Budgets are quite effective in terms of monitoring, as well as controlling costs. In some instances, the utilization of standards is not needed. This is particularly the case for tasks, which are repeated in frequently. Another advantage is that budgets control business processes and costs in a highly effective manner. Notably, the effectiveness of a budget is establish on the anticipation of cost patterns. Budgets are also advantageous since they are adjustable to reflect shifts in operating conditions, consequently, companies utilize budgets to control costs in most areas (Bokor, 2012). However, budgets can also deter effective implementation of innovative business ideas that entail more costs than those placed in the budget. 3. productivity Standards Productivity standards are highly applicable when standard costs are unavailable