Total delivery cost
Encyclopedia
Total Delivered Cost is the amount of money
it takes for a company
to manufacture and deliver a product
. Its components are:
Money
Money is any object or record that is generally accepted as payment for goods and services and repayment of debts in a given country or socio-economic context. The main functions of money are distinguished as: a medium of exchange; a unit of account; a store of value; and, occasionally in the past,...
it takes for a company
Company
A company is a form of business organization. It is an association or collection of individual real persons and/or other companies, who each provide some form of capital. This group has a common purpose or focus and an aim of gaining profits. This collection, group or association of persons can be...
to manufacture and deliver a product
Product (business)
In general, the product is defined as a "thing produced by labor or effort" or the "result of an act or a process", and stems from the verb produce, from the Latin prōdūce ' lead or bring forth'. Since 1575, the word "product" has referred to anything produced...
. Its components are:
- Total Manufacturing CostManufacturing costManufacturing cost is the sum of costs of all resources consumed in the process of making a product. The manufacturing cost is classified into three categories: direct materials cost, direct labor cost and manufacturing overhead.- Direct materials cost :...
: Costs incurred up to and inclusive of the productionManufacturingManufacturing is the use of machines, tools and labor to produce goods for use or sale. The term may refer to a range of human activity, from handicraft to high tech, but is most commonly applied to industrial production, in which raw materials are transformed into finished goods on a large scale...
of finished and wrapped palletPalletA pallet , sometimes called a skid, is a flat transport structure that supports goods in a stable fashion while being lifted by a forklift, pallet jack, front loader or other jacking device. A pallet is the structural foundation of a unit load which allows handling and storage efficiencies...
s or unit loadUnit loadA unit load combines individual items or items in shipping containers into a single "unit" that can be moved easily with pallet jack or forklift truck...
s, fit for introduction into the warehousing and distribution chain.
- Product Supply Non-Manufacturing Expense: Administrative and developmental costs associated with the purchase of materials, engineeringEngineeringEngineering is the discipline, art, skill and profession of acquiring and applying scientific, mathematical, economic, social, and practical knowledge, in order to design and build structures, machines, devices, systems, materials and processes that safely realize improvements to the lives of...
, designDesignDesign as a noun informally refers to a plan or convention for the construction of an object or a system while “to design” refers to making this plan...
of a plant worthy production process, and administrative costs required to manage it.
- Finished Product Logistics Costs: Costs incurred from the entry of finished, wrapped pallets, or unit loads to the warehousing and distribution chain, until delivery of cases to the customer's receiving dock.