Abstract
Fundamental to any logistics strategy is the minimisation of the costs of transportation, warehousing, inventory, and order processing while achieving the desired level of customer service. Benefits may be further leveraged through the coordinated management of related activities. Although a variety of logistics software has been developed, relevant variable marketing and distribution costs are frequently ignored. A prototype decision support system was developed during this research. It performs profitability analyses using the historical data contained in its database tables, and highlights the net customer profit margin for a given customer profile. It also displays the individual logistics, marketing and current asset charges, and can be used to evaluate the contribution margins of various customers. 'What-if' analysis helps the user to change critical demand, product, and marketing cost parameters in order to analyse their impact on the base case costs.
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