Performance Metrics
Different performance metrics (measures of performance) are used to examine the efficiency of an organization's logistics. The most popular and widely used performance metric is the landed cost. The landed cost is the total cost of purchasing, transporting, warehousing and distributing raw materials, semi-finished and finished goods.
Another performance metric equally important is the end customer fill rate. It is the percentage of customer demand which is satisfied immediately off-the-shelf (from on-site inventory). An alternative to fill rate, is system availability.
In recent years, the United States Department of Defense (DoD) has advocated the use of performance-based logistics (PBL) contracts to manage costs for support of weapon systems.
Read more about this topic: Logistic Engineering
Famous quotes containing the word performance:
“True balance requires assigning realistic performance expectations to each of our roles. True balance requires us to acknowledge that our performance in some areas is more important than in others. True balance demands that we determine what accomplishments give us honest satisfaction as well as what failures cause us intolerable grief.”
—Melinda M. Marshall (20th century)