Research Information System
İşletme Araştırmaları Dergisi, vol.10, no.4, pp.953-973, 2018 (Peer-Reviewed Journal)
Nowadays, there has been a growing interest in reverse logistics in both theory
and practice due to legislations, economic and ecological benefits, and social
responsibilities. If enterprises incorporating reverse logistics activities to its structure
want to realize the required level of customer service and comply with related
obligations at the lowest total cost, analyzing the actualized reverse logistics activities
and correct determination and reduction of costs of these activities are essential for
them. Traditional accounting methods are inadequate for accurate assignment of
overhead costs. In this paper, an actual application of Activity Based Costing (ABC) to
reverse logistics activities is presented in order to help managers to improve their
understanding of costs that arises from reverse logistics activities. An illustrative case
study in the end-of-life vehicle (ELV) recovery industry in Turkey is presented to
demonstrate the steps of how ABC is applied to reverse logistics systems. The results
enable to efficient management of reverse logistics activities and their costs in an ELV
recovery chain and exhibit which reverse logistics activities performed by a dismantler
cause the highest cost and can be improved. In the case study, products (ELVs) are
evaluated as inputs and the obtained materials from reverse logistics activities are
evaluated as outputs of the system by force of the nature of reverse logistics. Results
show that while most cost of the company (52.7%) was related with the output of B
Group of components/parts (sent to shredders); the minimum cost (12.3%) was realized
for the output of A Group components/parts (sent to recyclers). The remaining 35% of
the costs belong to the C Group of outputs (sent to secondary markets).