When all the costs of organizing the supply of imported or exported goods are known, it is necessary to calculate their prime cost. I always forecast the cost to understand unit economics.
If you manage a flow of expensive goods or a wide range of them, it is better to forecast the cost in relative terms. This is the percentage of each cost component in the cost of goods.
You can also calculate the projected cost by allocating costs to each unit of goods supplied. This formula is suitable if you supply single items in a relatively small assortment.
Recently, I have been managing bulk cargo flows. These are not very expensive goods that are delivered in large quantities. Something like commodities. The cost of such goods is projected in absolute terms per unit of weight.
To calculate the projected cost, I use the following algorithm (Prime cost calculation). The actual cost of goods is calculated automatically in the ERP system. The actual cost data is used to generate an automated P&L report in the same ERP system.
In managing your cargo flow, we automate any reports that will help you make timely management decisions.
Author: Mykola Soloviov
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