Certified in Logistics, Transportation and Distribution (CLTD) 2025 – 400 Free Practice Questions to Pass the Exam

Cost-to-serve analysis is a comprehensive approach that evaluates all the costs associated with serving a particular customer or delivering a product to a customer. This analysis goes beyond simply looking at direct costs and encompasses a broad spectrum of expenses incurred across various activities within the supply chain.

By including costs such as production, storage, handling, transportation, and customer service, this analysis helps companies understand the total financial impact of serving different segments of customers or product lines. It can also highlight which customers or products are the most profitable or which may be causing financial strain. This holistic view is essential for effective decision-making and strategic planning in logistics and distribution.

In contrast, focusing solely on direct shipping costs or overhead costs associated with production would provide an incomplete picture, leading to potentially misguided business decisions. Similarly, while marketing expenses are important, they pertain specifically to customer acquisition rather than the comprehensive cost to serve existing customers. Therefore, option C is the most accurate reflection of what cost-to-serve analysis encompasses.