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True Cost
Posted:
Fri Jun 03, 2016 2:10 pmby CTB
Several years back I was in a training session where I was taught how to determine the "true cost" of a part. There is a way to factor in the intangibles, such as handling costs, shelf space, etc. that I thought was broken down to a formula. The actual "cost + percentage" varies from dealer to dealer but it's still broken down to a formula, & I have no idea where to find it. When I said several years ago I probably should have said several several years ago.
Can anybody help me with this?
Thanks!
Re: True Cost
Posted:
Fri Jun 03, 2016 5:52 pmby bluepart
I have one of those old hardbound GM Parts Operations Guide, which was a really good book, and it has a formula for True turnover , but I did not see a True cost formula listed.
Re: True Cost
Posted:
Fri Jun 03, 2016 7:55 pmby possum
Search on this site (in the top right corner) :
BREAK EVEN POINT
Re: True Cost
Posted:
Fri Jun 03, 2016 8:12 pmby Mike Nicholes
Holding cost, or the cost of having the money on the shelf for one year, like a pile of unused cash, averages about 28%. If you want to get down to the real nitty gritty, you will have to take all the expenses charged to the parts department, fixed, semi-fixed, etc and factor it against the shelf value of the inventory; a little complicated, but in most cases the parts managers don't have a lot of control over some of the expenses charged to the parts department, but you still have to cover (pay) them.