Applying Cross-Decking and Activity-Based Costing to Military Distribution Centers: A Proposed Framework.
AIR FORCE INST OF TECH WRIGHT-PATTERSON AFB OH
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Current events and fiscal constraints have focused DoD planners attention on reducing logistics costs and improving efficiency while maintaining effective combat operations support. Military leaders are seeking private industry best practices to help achieve these goals. Two commercially successful business practices that may help the DoD achieve its goals are cross-docking and Activity-Based Costing. Cross-docking is a commercially proven approach to material distribution through a distribution center that can help reduce inventories, speed material flows, and cut related logistics activity costs. However, the DoD is faced with the challenge of costing current and potential logistics processes with an antiquated costing structure. Military planners may be able to use Activity-Based Costing to answer this costing challenge and help them decide whether or not to invest in cross-docking technologies. This thesis is a proposed framework for constructing a tool that may provide managers performance and cost measurements of current military distribution center operations, and estimate expected performance and cost changes as a result of incorporating high technology cross-docking methodologies. The tool incorporates computer simulation modeling to measure the time performance, and a proposed Activity-Based Costing model to measure available versus used capacities, and costs, of existing and potential distribution processes and activities. The use of simulation for costing of activities and product cost allocation is an unexplored area of Activity-Based Costing in the literature. Furthermore, ABC and simulation have not been used in combination to simulate and cost specific activities in a DoD distribution center. The implication for this research is to provide DoD logistics planners a decision support tool for possible military distribution center efficiency, effecti
- Administration and Management
- Economics and Cost Analysis
- Logistics, Military Facilities and Supplies