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Distribution & inventory management, fixed or variable cost?

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Ian
Coach
on Aug 10, 2021
Ex-BCG | NYU Stern | MBB, Tech, & Strategy Coach | 5,000+ Sessions | 500+ Offers | 1,000+ Candidates | 100+ Countries

It depends!

Your hourly laborers would be variable. Your Inventory Management system would be fixed. Rent = fixed. Trucks, if purchased are fixed. Trucks, if rented/leased are variable.

Fixed means the costs do not change when the # of procuts (i.e. goods processed) increases.

Variables costs do change for each incremental unit produced/processed/served.