The influence of the Cost-to-Serve methodology on customer profitability
The influence of the Cost-to-Serve methodology on customer profitability

Summary/Abstract: The article covers the subject of the Cost-to-Serve as a costing method. There are customers providing little profits to the enterprise and some that even generates a loss. Cost-to-Serve is a tool allowing for optimising costs to make every customer profitable. In the first part of the paper covers the whole concept and emphasise its main areas. The second part shows how Activity Based Costing may be used as a sub process to the CTS analysis. The third part focuses on the Customer Profitability Analysis (CPA) for the Cost-to-Serve methodology. The paper contains the example of applying the Cost-to-Serve. It uses results of the research conducted in the Brazilian food industry to present how the Cost-to-Serve affects real costs. The article ends with conclusions concerning the Cost-to-Serve concept and its further perspectives.

• Details
• Contents