Cost to Serve Report

This page shows more details about the costs shown on the Cost Report page. It gives a clearer picture of how different types of costs correspond to demand at a particular location.

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Note

These costs are an approximation of the actual cost breakdown, as there are some assumptions made that might not apply to every situation.

  • The fixed costs are evenly distributed over the total throughput, while in reality, this cost might be different for different products. So if 100,000 units flow through a DC with a $1M fixed cost, each unit will get $10 of fixed cost assigned to it.

  • If one product comes from multiple locations (with different costs) into a particular location, the model does not have sufficient information to sort out the exact cost per product and customer, so we take the average cost per product based on the total cost for that product. This means that the cost shown may not be the actual cost per product and customer, but the sum of the cost breakdown is consistent with the total costs shown on the Cost Report page.

Location selection

Select a location by clicking on a node in the map. The cost charts will show the data for the selected location. You can zoom, scroll, and reset the map focus to the default area (from the action menu widget-action in the top right corner).

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Cost breakdown

This bar chart shows the breakdown of the total cost per unit to deliver to the selected location.

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The selected location is shown in the title bar. The side panel shows the Legend for the colors. The tooltips on this chart also provide more detailed information about the type of cost, the actual cost, and the share of the total.

You can toggle between the breakdown cost per unit or for the total demand (from the action menu widget-action in the top right corner of the chart).

Cost Breakdown Levels

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Breakdown per unit

This table shows you more details about where the costs are incurred. For example, you can see which DC/Production facility contributed to the fixed cost, and how much, or which transportation lanes made up the secondary transport cost.

You can toggle between the breakdown cost per unit or for the total demand (from the action menu widget-action in the top right corner of the chart).

Inter-resource cost

This table summarizes the cost which occurs when products are transported between resources.

You can toggle between the breakdown cost per unit or for the total demand (from the action menu widget-action in the top right corner of the chart).

Cost breakdown for all demand locations

This table contains the same data as the bar chart in a different format. It shows the cost breakdown per demand location.

You can toggle between data for all locations and the selected location only (from the action menu widget-action in the top right corner of the chart).

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The data interpretation is supported by the filters on the side panels, which are Product Filter and DC Filter. For more about filters go to Filtering in Network Design.

Cost breakdown for all demand locations, by route

This is the same data as in the previous table, but now it is broken down by the route through which it flows through the network. This allows you to see how and where the cost to serve is incurred. In this table, you see that every line with cost has an origin and a destination. If the origin and the destination are the same, the cost is incurred at that location. (Like supply cost, handling cost, production cost). If the origin and the destination are different, the cost is incurred between the two locations (Primary cost, Secondary cost, inter resource cost).

The resulting tables looks like this:

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The order element is the order in which this goes through the network. A supplier has order 1 and the costumer location is the last one. This order disappears when you are comparing multiple scenarios/cases.

Also in this table, you can toggle between data for all locations and the selected location only (from the action menu widget-action in the top right corner of the chart) and this table is also supported by the same filters as the previous table.