Logistics business has been growing steadily over the year. But economic growth is currently slowing down due to economic recession and countries across the globe are struggling to cope with slowing economies. The importance of cost management is being emphasized as profits are down.
The purpose of this study is to suggest an approach to the warehouse operators to efficiently manage operating cost and support the strategic decision-making to find bisiness model through the cost analysis.
This study is to find out the cost of service type to be performed at the warehouse in new port hinterland through Case study. To do the case study, TDABC model is applied to Busan Newport Logistics centre Division of the Global Logistics company, H in Korea which uses the method of basic cost analysis.
First of all, the operating cost is allocated in that department, customer service part, equipment part, inspection part, etc. And the cost of rate is calculated on the basis of the operating time for specific activities of the department. Finally, after building the equation of time by service type, the total cost is calculated per one service.
In conclusion, the outcome of this study is to enable to determine the break-even point of the service by calculating the total cost of specific services that are provided by warehouse. And that is to enable to select a profitable business with competitive cost by comparing and analyzing the cost of service type.
Expected effect of case study is summarized as follows.
1. Cost Saving through process improvement. (By removing unnecessary processes)
2. Encouragement to use low-cost service type. (If the same revenue structure)
3. Profitability review and reference of sales. (To attract new customer)