Systems cost to perform the process "manage returns; manage reverse logistics" per $100,000 revenue

This measure calculates the systems cost per $100,000 revenue to perform the physical handling, information processing, and disposition of the product and packaging returned by the buyer to the seller or an intermediary. Associated tasks include return approval, transportation coordination, advance communication, product tracking, receipt, disposition of the return, and processing warranty claims. Systems costs include a variety of specific costs related to computer hardware/software, network maintenance, data storage, etc., and all fees paid to full-time, part-time, or temporary employees or independent contractors hired to perform these services. This measure is part of a set of Cost Effectiveness measures that help companies understand all cost expenditures related to the process "manage returns; manage reverse logistics."

Benchmark Data

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Measure Category:
Cost Effectiveness
Measure Id:
103306
Total Sample Size:
153 All Companies
Performers:
25th
Median
75th
Key Performance
Indicator:
Yes

Compute this Measure

Units for this measure are dollars.

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Systems cost to perform the process "manage returns; manage reverse logistics" / (Total business entity revenue * 0.000010)

Key Terms

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Total Annual Revenue/Net Revenue

Total annual revenue is net proceeds generated from the sale of products or services. This should reflect the selling price less any allowances such as quantity, discounts, rebates and returns. If your business entity is a support unit and therefore does not directly generate revenue, then provide the revenue amount for the units you support. For government/non-profit organizations, please use your non-pass-through budget. For insurance companies the total annual revenue is the total amount of direct written premiums, excluding net investment income. Note: Business entity revenue needs to only include inter-company business segment revenue when the transactions between those business segments are intended to reflect an arm's length transfer price and would therefore meet the regulatory requirements for external revenue reporting.

Systems Cost

Systems costs include all expenses, paid or incurred, in conjunction with:

Computer hardware or computer software acquired by the organization or provided to the organization through service contracts.

Any related costs to process, service and maintain computer hardware or computer software. The costs of providing and maintaining services for each applicable process (e.g., computer system(s) processing (CPU) time, network/system communication charges, maintenance costs for applications and data storage). This includes the costs related to LANs, WANs, etc. This does not include one-time costs for major new systems developments/replacements. Consultant fees should not be included in depreciation of new system implementations. Include only those costs that occur more than six (6) months after implementation, as normal system maintenance costs. Any systems cost (e.g., maintenance) which is outsourced to a third party supplier should be captured in the separate cost category labeled outsourced cost.

Systems cost should include all salaries, overtime, employee benefits, bonuses or fees paid to full-time, part-time or temporary employees or independent contractors who perform services relating to computer hardware, computer software, processing or systems support.

Cost Effectiveness

Cost effectiveness measures are those in which two related variables, one of which is the cost and one of which is the related outcome related to the expenditure are used to determine a particular metric value.

Median

The metric value which represents the 50th percentile of a peer group. This could also be communicated as the metric value where half of the peer group sample shows lower performance than the expressed metric value or half of the peer group sample shows higher performance than the expressed metric value.

Measure Scope

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Cross Industry (6.1.1)

  • 4.5.5.1 - Authorize and process returns (10364) - Approving and carrying forward the requests by the customers to return the product. This is part of the process of returning a product in order to receive a refund, replacement, or repair during the product's warranty period.
  • 4.5.5.2 - Perform reverse logistics (10365) - Moving products from their typical final destination to the origin or manufacturing destination for the purposes remanufacturing or refurbishment. Implement a transportation system to ensure that the products are returned back to their originating position safely and in tact.
  • 4.5.5.3 - Perform salvage activities (10366) - Executing activities for reinstating the returned products. Present the customer with additional incentives of compensation in case of any defective products delivery or any discrepancy in the product specifications in order to save the order from being permanently returned.
  • 4.5.5.4 - Manage and process warranty claims (10367) - Managing and administering any claims on the warranty of products. Handle and approve the customer claims for repair or replacement of, or compensation for non-performance or under-performance of an item, as provided for in the warranty document.
  • 4.5.5.5 - Manage repair/refurbishment and return to customer/stock (14195) - Administering the reinstatement of the returned product in order to return them back to customers. Repair or remanufacture the defective or ineffective products returned by the customer. Process the delivery of the repaired or remanufactured products back to the customer.