Understanding the Costs of Warehousing

Source: Multibriefs, Ken Ackerman January 2017

All companies with warehouses incur the same elements of cost, but they compile them differently. However, a costing system can be used to compare costs of one warehouse to another, or one company to others.

Some warehousing costs tend to be ignored or misallocated because the analyst does not recognize where they belong. In any costing system, allocation of overhead costs is a matter of judgment, and no specific formula will be correct for every user.

Four Categories of Warehouse Costs

1. Handling: All expenses associated with moving product in or out of the warehouse should be included in the handling cost center. The largest component is the labor used to handle the product that moves through the distribution center. It includes receiving, put-away, order selection and loading. It also may include labor to re-warehouse, repackage or refurbish damaged product.Handling also includes all costs associated with the equipment used to handle product in the warehouse, such as the depreciation of equipment cost and the cost of fuel or electricity to power the equipment.

   Other handling expenses are the detention of truck or rail cars, operating supplies and trash disposal. In effect, handling includes all those costs that are associated with “goods in motion.”

2. Storage: Storage expenses are costs associated with “goods at rest…

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10 Fun Facts About Mardi Gras

Source: Multibriefs, by David G. Houser January 2017

With Mardi Gras celebrations set to cut loose in a frenzied parade of feathers, costumes, beads and booze, let’s get ready for the party with some fun and not-so-well-known facts surrounding America’s wildest and most colorful festival.

1. Mardi Gras, meaning “Fat Tuesday” in French, originated as a Christian holiday with roots in ancient Rome. Rather than outright abolishing hedonistic pagan traditions of the time, religious leaders incorporated some of them into the new faith. That gave way to Carnival season, a period of celebration beginningJan. 6 (King’s Day) and lasting until the 40-day fasting period of Lent begins. These Carnival celebrations spread from Rome across Europe to the colonies of the New World.
2. Although it is always celebrated in February, the actual date for Mardi Gras differs from year to year. Just remember this: it is always the Tuesday before AshWednesday. For 2017, Mardi Gras falls on Feb. 28.

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