What Advantages May Result from Effectively Outsourcing the Logistics Function

question 129

Essay

What advantages may result from effectively outsourcing the logistics function to a third party?

Interpret the implications of variances on material cost and efficiency.

Recognize the importance of standards in budgeting and variance analysis.

Understand how the measurement of efficiency varies with actual and standard costs in manufacturing overhead.

Comprehend the impact of demand and activity levels on variable and fixed overhead variances.

---

Definitions:

Company Owned Store

A retail establishment directly controlled and operated by the corporation that owns the brand, as opposed to a franchise.

Manager

An individual responsible for controlling or administering all or part of a company or similar organization.

Sharing Contracts

Agreements that involve distribution of profits or losses among parties based on pre-determined criteria.

Franchising

A method of business expansion where a company (franchisor) allows individuals (franchisees) to operate a business using its trademarks and business model.