Financial Measures

Financial Measures

The measures taken for gauging different fixed and operational costs related to a supply chain are considered the financial measures. Finally, the key objective to be achieved is to maximise the revenue by maintaining low supply chain costs.
There is a hike in prices because of the inventories, transportation, facilities, operations, technology, materials, and labour. Generally, the financial performance of a supply chain is assessed by considering the following items:Image result for Financial Measures in SCM diagram
• The cost of raw materials.
• Revenue from goods sold.
• Activity-based costs like the material handling, manufacturing, assembling rates etc.
• Inventory holding costs
• Transportation costs
• Cost of expired perishable goods
• Penalties for incorrectly filled or late orders delivered to customers
• Credits for incorrectly filled or late deliveries from suppliers
• Cost of goods returned by customers
• Credits for goods returned to suppliers
In short, we can say that the financial performance indices can be merged as one by using key modules such as activity based costing, inventory costing, transportation costing, and inter-company financial transactions.