Logistic Costs of Quality and Their Impact on Degree of Operating Leverage
Logistic Costs of Quality and Their Impact on Degree of Operating Leverage

Summary/Abstract: The development of logistics increasingly emphasizes its relationship with quality management. This follows from a broader definition of quality, which affects every area of the company. Logistics by its association with the elements influencing on the satisfaction of customer needs plays a very important role in customer service. Therefore, given the fact that the issue of quality has a wide range of impacts on the logistics, quality must be considered as one of the most important determinants of the efficiency of logistics systems, and the development of logistics enterprises. Therefore, departments connected with logistics are generating costs of quality. The article presents the relationship between the cost of quality and logistics costs. New division of logistics costs of quality shows the impact of these costs on EBIT (Earnings Before deducting Interest and Taxes) and their influence on operation risk, which is measured by DOL (Degree of Operating Leverage).

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