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 Outbound  On Time Ready to ship The percentage of   Warehousing Cost  Distribution cost a   The cost to run   Total distribution costs
 orders ready for                percent of COGS         distribution relative    / Total COGS (based

 shipment at the planned                                 to COGS. Activities      on corporate income
 time                                                    included as part of      statement)
 Note: “ready   Number of orders                         total distribution
 for shipment”   ready for shipment on                   operating costs are
                                                         management activities,
 typically means   time / number of total                track inventory
 that packaging   orders shipped.                        deployment, receive,

 and shipping                                            inspect and store
 documents are                                           inbound deliveries,
 completed and                                           track product

 ready for pickup.                                       availability, pick,pack
 Warehousing Cost  Distribution cost as a   The cost to run   Total Distribution   and ship product
 percent of sales   distribution relative to   Costs / Total sales  for delivery, track
 total sales, Activities                                 inventoryaccuracy,
 included in the operate                                 track third-party
 warehousing process                                     Logistics storage and
 are management                                          shipping performance.
 activities, track   Warehousing Cost  Distribution cost per   The cost to run    Total cost of operating
 inventory deployment,           unit shipped            distribution relative    distribution / total units
 receive, inspect                                        to the units shipped     shipped
                                                         through distribution.
 and store inbound                                       Distribution costs
 deliveries, track                                       include : management
 product availability,                                   activities; track
 pick , pack, and ship                                   inventory deployment,
 product for delivery,                                   receive , inspect
 track inventory                                         and store inbound
 accuracy, track                                         deliveries, track
 third-party logistics                                   product availability ,
 storage and shipping                                    pick, pack, and ship
                                                         product for delivery
 performance.                                            , track inventory
                                                         accuracy, track
                                                         third-party logistics
                                                         storage and shipping
                                                         performance
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