Cost Accounting in Multiple-Source and Multiple-Sink Logistics Management From Network Flow Perspectives

Abstract

Transportation and logistics costs are becoming a large portion of the operating expenses for many businesses. Recently, supply chain disruptions caused by the COVID-19 pandemic and inflation crisis have brought challenges, especially, to many small- and medium-sized companies. Not only are companies struggling with logistics costs, but logistics bottlenecks are often preventing businesses from growing, expanding, and obtaining additional market shares. According to both academics and practitioners, there must be more literature and studies to address these logistics management challenges from cost accounting perspectives. This study focuses on multiple-source and multiple-sink scenarios, in which products are delivered from various production units to various stores. Optimized solutions to these cases may suggest optimal logistics strategies in terms of the minimized costs, as well as provide insights for later profitability analysis through common cost allocations and segment income statement reports. This paper can contribute to the practical examples in logistics management for businesses and is an addition to the current literature on cost accounting issues.