Supply Chain Management Accounting

Managing Profitability, Working Capital and Asset Utilization

Simon Templar

• Publisher: Kogan Page
• Year: 2019
• ISBN:
  9780749473006
• Edition: 1
• Topic: Business
• Subtopic: Finance
• Index: Business

The need to contain costs across the business is as strong as ever and the search for cost reduction opportunities is intensifying. There still remains one last major opportunity to take out costs - through the supply chain. Ultimately all costs will make their way to the final marketplace to be reflected in the price paid by the end user. Smart companies instead seek to make the supply chain more competitive through the value it creates and the costs it reduces overall. They have realized that the real competition is not company against company but rather supply chain against supply chain. Supply Chain Management Accounting looks at how the evolution of supply chains has been dramatic over the last few years, with more and more companies moving to sourcing overseas, distributing finished goods to overseas markets, and increasing their international operations. The seeking of low-cost country sourcing, optimizing manufacturing, and exporting products and services has created new challenges to demand forecasting and supply chain planning. Supply Chain Management Accounting presents a wide range of approaches and ground-breaking research findings. The book covers profitability, liquidity and asset utilization, product costing, activity-based costing, investment appraisal, customer profitability analysis, budgeting and sales and operations planning. Online supporting resources include invaluable study questions and worked solutions to reinforce the learning as well as multiple-choice questions with solutions and PowerPoint activities.

10

Investment appraisal

In previous chapters you were introduced to two types of asset: non-current and current (Chapter 3); you were also introduced to different categories of expenditure, revenue and capital (Chapter 2) and depreciation (Chapter 5). In this chapter we will revisit these topics from the perspective of capital investment appraisal decisions taken by supply chain management practitioners.

Before we jump into the topic of investment appraisal, I would like to share with you a description of my typical rail journey to London, but it could be any commuter’s rail journey, in any geographical location, and perhaps even yours.

I press the flashing button on the car park barrier and a ticket is issued. I finally find a space on the top floor and park my car, then take the lift down to the railway station concourse. I walk over to the booking office and purchase my train ticket from the ticket vending machi...

Table of contents

• Cover
• Title Page
• Copyright
• Contents
• List of Figures
• List of Tables
• Acknowledgements
• 01 Introduction
• 02 The income statement
• 03 The balance sheet
• 04 Cash and working capital management
• 05 An introduction to depreciation
• 06 Supply chain management and financial performance
• 07 Marginal costing
• 08 Absorption costing and variance analysis
• 09 Contemporary costing methods
• 10 Investment appraisal
• Index
• Backcover