In today's twenty-first century, global outsourced business world, the traditional and somewhat simplistic approaches used to measure cost for sourcing decisions of direct materials fall short.
stage, including things like inspection costs, repair costs, paperwork costs, transportation, technician's time, slow-downs in production, etc. This requires rigorous activity-based costing. On top of that, you need to factor in and put a dollar figure on the damage to customer loyalty and the resulting long-term loss of revenue and market share from failures in the field. Total Landed Cost Calculators and In-house efforts In spite of these challenges, progress has been made in specific areas of total