Improvement categories cost accounting

The individual company needs accurate financial data to make wise globalization decisions. Revenue and cost accounts, translated into improvement categories, are particularly useful. Table 7.1 describes the supply chain improvement categories we recommend and possible impacts from globalization on each category. 

Referring to Figure 9.5, we can see a model that will help initiate the preliminary conversations with the selected suppliers — the total cost of ownership. The usual focus with any buy-sell share session is placed on the invoice price and how it can be improved. Freight is separated from the part or supply cost so a focus can be placed on both of these elements. In SRM, the focus moves higher to measure the total value that suppliers provide. Above the usual base line, we find a category marked execution costs. Here attention is on the costs associated with making the purchases, handling the accounts payable, systems administration, and the delivery mechanisms. 

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