ABSTRACT
The growing relative significance of the costs associated with physical distribution is making it increasingly necessary to structure physical distribution cost control within the company. The physical distribution system may be characterised as ‘distribution from assembly line to consumer’. The physical distribution manager who is directly responsible for the operational activities in his area naturally requires a total cost picture, a cost picture per operational unit and a cost picture for each cost centre. The goods flows to the various country warehouses are known. Identifying the activities carried out and determining those that have given rise to them creates insight into the composition of indirect costs. The costs are incurred by the activities that are required to produce the product or the service in relation to the products or services. In essence, the method involves looking at the causal relationship between activities and costs.
