The Importance of Risk Costs in the Logistics Supply Process

E. Kulinska, M. Dendera-Gruszka and D. Maslowski

European Research Studies Journal, 2020, vol. XXIII, issue 3, 613-628

Abstract: Purpose: The aim of the article was to describe the importance of the cost of risk in business management in the context of logistic processes. In this article, the costs of risk refer to the procurement process. Approach/Methodology/Design: During the research, the logistic process of interpretation was interpreted as a reliable security of the spatiotemporal availability of directly production materials, i.e. raw materials, construction materials, products and semi-finished products, as well as spare parts, elements, subassemblies, modules, etc. keeping the company in full production readiness. Findings: Based on the data of enterprises in the different industries and activities: trade, production, services, mixed, trade and services., six risk factors have been identified which are important from the point of view of decisions taken in managing the logistics process of supply. The example demonstrates that the characterization principle allows showing a significant difference between the total and actual costs of risk factors. Practical Implications: The recording of logistics costs is a very strong basis for dynamic control of these costs, both by type and in particular time periods, as well as by place of origin. The theory of logistics costs and the issue of their minimization is the main task of logistics managers in the process of planning and organizing logistics supply chains, on the scale of the entire enterprise and in all phases of economic activity. Originality/Value: Parameterization of the risk costs of logistics processes gives new possibilities in this regard. Empirical verification of the parameterization model in the delivery logistics process is an opportunity for companies to develop and avoid the undesirable effects of bad financial calculations.

Keywords: Risk; Logistics cost; Logistics process (search for similar items in EconPapers)
JEL-codes: O14 P42 P51 (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:ers:journl:v:xxiii:y:2020:i:3:p:613-628

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