Your Go-To Resource for Understanding Supply chain glossaries and key Logistics Terms

Activity-Based Costing – A costing method that assigns costs to products based on the activities required to produce them, providing a more accurate reflection of the costs incurred.

An inventory management approach that prioritizes products based on their classification in the ABC analysis, focusing more resources on the most valuable items.

In cost management, a representation that illustrates the cost of resources used over a period and how these are consumed by activities and subsequently traced to products, services, or customers.

A cost management system that tracks financial and operational data on resources, activities, drivers, and measures. ABC models are created and maintained within this system.

Demand that falls outside the limits established by management policy, often due to new customers or changing needs of existing customers.

A method of inventory valuation where both variable and a portion of fixed costs are assigned to each unit of production. Fixed costs are typically allocated based on labor hours, machine hours, or material costs.