TCO in transportation industry:
The TCO concept is widely used in the transportation industry. For example, the TCO defines the cost of owning an automobile from the time of purchase by the owner, through its operation and maintenance to the time it leaves the possession of the owner. Comparative TCO studies between of various models help consumers choose a car to fit their needs and budget.抄原文请+QQ3249'114 辣'文,论'文"网
Some of the key elements incorporated in the cost of ownership for a vehicle include:depreciation costs, fuel costs, insurance, financing, repairs, fees and taxes, maintenance costs, opportunity costs.
1.4.2 Logistics Costs
The costs that a firm incurs for physical supply and physical distribution often determine how frequently its logistics system should be replanned. All other factors being equal, a firm producing high-valued goods (such as machine tools or computers), with logistics costs being a small portion of total costs, will likely give little attention to the optimality of logistics strategy. However, when logistics costs are high, as they can be in the case of packaged industrial chemicals and food products, logistics strategy is a key concern. With high logistics costs, even the small improvements brought about by frequent replanning can result in substantial cost reduction.
Customer service broadly includes inventory availability, speed of delivery, and order filling speed and accuracy. The costs associated with these factors increase at a higher rate as the customer service level is raised. Therefore, distribution costs will be quite sensitive to the level of customer service provided, especially if it is already high.
2. Trade-offs between Service Level and Cost毕业论文http://www.751com.cn/
In a practical way, business logistics management from supply chain management promotes the same mission in so many respects : to get the right goods or services to the right place, at the right time, and in the desired condition. We want to make the greatest contribution to the firm through achieving the mission, but the service level always conflicts with the significant cost in logistics process.
2.1 Cost-benefit Analysis
Cost-benefit analysis is a term that refers both to: helping to appraise, or assess, the case for a project, programme or policy proposal, and an approach to making economic decisions of any kind.（Cost-bene. 2011）
Under both definitions the process involves, whether explicitly or implicitly, weighing the total expected costs against the total expected benefits of one or more actions in order to choose the best or most profitable option. The formal process is often referred to as either CBA (Cost-Benefit Analysis) or BCA (Benefit-Cost Analysis).
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