In talking about customer service costs it’s absolutely essential to distinguish between customer service department operating costs, which are the routine costs of equipping, staffing and running the department day-to-day, and total customer service costs which include departmental operating costs but also physical distribution costs and some other costs of selling. While it is true that changes in customer service levels are likely to impact departmental operating costs, there will be an even broader impact on transportation and inventory costs.
KeywordsVariable Cost Customer Service Fixed Cost Zone Manager Order Entry
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