Applying Cross-Decking and Activity-Based Costing to Military Distribution Centers: A Proposed Framework

Author

Jonathan P. Elliott
Dwight H. Hintz Jr.

Date of Award

9-1997

Document Type

Thesis

Degree Name

Master of Science

Abstract

Current events and fiscal constraints have focused DoD planners' attention on reducing logistics costs and improving efficiency while maintaining effective combat operations support. Military leaders are seeking private industry best practices that may help the DoD achieve these goals. Two commercially successful business practices that may help the DoD achieve its goals are cross-docking and Activity-Based Costing (ABC). Cross-docking is a commercially proven approach to material distribution through a distribution center that can help reduce inventories, speed material flows, and cut related logistics activity costs. However, the DoD is faced with the challenge of costing current and potential logistics processes with an antiquated costing structure. Military planners may be able to use ABC to answer this costing challenge and help them decide whether or not to invest in cross-docking technologies. This thesis is a proposed framework for constructing a tool that may provide managers performance and cost measurements of current military distribution center operations, and estimate expected performance and cost changes as a result ofincorporating high technology cross-docking methodologies. The tool incorporates computer simulation modeling to measure the time performance, and a proposed ABC model to measure available versus used capacities, and costs, of existing and potential distribution processes and activities. The use of simulation for costing of activities and product costs is an unexplored area of ABC literature. Furthermore, ABC and simulation have not been used in conjunction to simulate and cost specific activities in a DoD distribution center. The implication for this research is to provide DoD managers a decision support tool for contemporary logistics decisions.

AFIT Designator

AFIT-GTM-LAL-97S-3

DTIC Accession Number

ADA329811

Comments

Presented to the Faculty of the Graduate School of Logistics and Acquisition Management of the Air Force Institute of Technology.

Co-authored thesis.

Recommended Citation

Elliott, Jonathan P. and Hintz, Dwight H. Jr., "Applying Cross-Decking and Activity-Based Costing to Military Distribution Centers: A Proposed Framework" (1997). Theses and Dissertations. 5804.
https://scholar.afit.edu/etd/5804