Study On The Optimized Cost In Supply Chain Management & The Logistics Finance Application For AE Company

Since 21st century, with the rapid development of China's real estate industry, the demands for natural stone is on the increase in building materials market. China has pretty rich natural stone resources, the trading business begins early and has formed the professional system of development. China has become one of the biggest country of stone trading and production in the world. In such circumstances, AE Stone Trading Company grew out of nothing, not only seized this business opportunity, but also edged itself into the building materials industry with numerous strong competitors. Being a typical a small and medium-sized enterprises in this fierce competition, however, AE involves huge risks especially when running business nearby many financial and real-estate tycoons. It is able to share the market in the entire industry chain when business goes well. Otherwise, AE should be gobbled up by the said tycoons In this case, AE is suppose to analyze and study the cost structure of supply chain of itself by using scientific management, take some measures, like choosing strategic outsourcing for the supply chain, building the processing business in the form of equity participation by order, and using the Third Part Logistics etc. While lowering the cost, the company will be on the ways between mine and building site– the terminal sales.There is more. Purchasing natural stone ties up the funds. The solution for the short of funds on the running of big projects, is standardizing the supervision on the supply chain like the big logistics enterprises, learning and using the succeeded experience from logistic finance. Using the economic order quantity (EOQ) model and sales cost analysis, this article analyze the cost structure of the supply chain during manufacturing & managing activities. It runs through each logistics operation, covering mine mountain to sea port, stone yard to factory, warehouse to customer's construction site. It concerns The L/C balance of accounts, international charter, port clearance, customs clearance, inspection, loading & unloading and delivery, production, storage and shipping, and so on. It states, how to take the Activity-based Costing to calculate and reduce the cost on supply chain and to strengthen its feasibility on the logistics supervision; how to get loan from banks by realizing well supervision, depending on the natural stone's characters, like non-deterioration, easy-storage and stable-shape. Finally, it is able to reduce the cost, meanwhile, to optimize the pattern of earnings.I would like that this article is helpful for the sustainable development to AE Stone Trading Company.