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Integration Between Operations and Financial Model

The integration between the operations and financial formulations is carried out again through the sales of products, the direct costs, the fixed cost associated with SC network, and the total capital investment. [Pg.227]

Revenue is calculated by means of net sales which are the income source related to the normal SC activities. The total income incurred in any period t can be easily computed from the sales of products executed in period t as stated in Eq. (9.16). [Pg.228]

The total fixed cost of operating a given SC structure can be computed using Eq. (9.17). FCFJjft is the fixed unitary capacity cost for production and distribution equipment. [Pg.228]

The cost of purchases from supplier e, which is computed through Eq. (9.18), includes purchases of raw materials, transportation, and production resources. Note that e refers to supplier entity and not to supplier location / (/ eSup). [Pg.228]

The purchases (Purch l f ) associated with raw materials made to supplier e can be computed through Eq. (9.19). Here, fest is the cost of raw material s purchased from supplier e. Since it is assumed that several suppliers of raw materials may exist, Eq. (9.20) expresses that the total quantity of raw materials purchased in period t must be equal to the sum of the amounts purchased from each supplier e. [Pg.228]


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