ABSTRACT
This chapter describes how to apply the technique called activity-based costing (ABC) to make any number of decisions that require an understanding of supply chain costs. It also describes a methodology for applying multicompany ABC for supply chain decision making. The high-level alternative seeks knowledge of the role of activity-based costing in understanding costs, product profits, and partner contributions along supply chains. The chapter describes a methodology for applying the activity-based costing tool to a vertically integrated retail enterprise. The growth of omnichannel paths to the customer makes ABC analysis potentially more valuable. Each organization will have to weigh the value of pursuing ABC for its own business. However, it is increasingly intractable to confine one's perspective to one's own organization. In a supply chain world, a broader view of cost is needed.
