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Distribution & inventory management, fixed or variable cost?

profitability
New answer on Aug 10, 2021
1 Answer
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Anonymous A asked on Aug 10, 2021

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Ian
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replied on Aug 10, 2021
#1 BCG coach | MBB | Tier 2 | Digital, Tech, Platinion | 100% personal success rate (8/8) | 95% candidate success rate

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.

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Ian

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