Transportation, Freight & Distribution worked example

Outbound Logistics Cost at 110% outbound cost allocation share: a worked example

Push outbound cost allocation share up to 110% and the picture changes. This example computes every intermediate figure at that operating point. Use it to build a cost-to-serve view by customer, channel, SKU family, or distribution lane.

The inputs for this scenario

  • Outbound orders shipped: 1,250 orders (unchanged)
  • Fulfillment and freight cost per order: 18.5 $ / order (unchanged)
  • Outbound cost allocation share: 110 % (raised for this scenario; the documented default is 100)
  • Fixed outbound overhead charges: 2,200 $ (unchanged)

Working through the calculation

  • Applying the documented formula (Variable outbound logistics cost = outbound orders × outbound cost per order × allocated outbound share) to the inputs above produces each figure below.
  • At this operating point the engine returns 27,638 $ for total outbound logistics cost, the number this scenario is built around.
  • At this operating point the engine returns 22.11 $ / unit for outbound cost per order.
  • At this operating point the engine returns 25,438 $ for variable outbound logistics cost.
  • At this operating point the engine returns 2,200 $ for fixed charges.

How this compares with the baseline

  • Against the tool's baseline example, where outbound cost allocation share sits at 100% and the headline result is 25,325 $, this scenario comes in 9.13% above the baseline at 27,638 $.
  • It computes total outbound logistics cost by multiplying orders shipped, cost per order, and an allocation share, then adding fixed outbound overhead. The value of this scenario is the size of the gap it exposes: that gap, priced out over a year, is the budget you can justify spending to close it.

Results at a glance

  • Total outbound logistics cost: 27,638 $ (headline result)
  • Outbound cost per order: 22.11 $ / unit
  • Variable outbound logistics cost: 25,438 $
  • Fixed charges: 2,200 $

Run it with your numbers

  • Every input above is editable in the live Outbound Logistics Cost calculator, which recalculates instantly and can be shared with the inputs intact.

Last reviewed 2026-05-12.