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Cost Drivers at Wal-Mart

I am thinking about using Wal-Mart as the company in review. But I need help determining:
1. Based on publicly available information for your company, can you discern what the cost drivers are for your company? If you can, what are they? If not, what cost drivers do you believe are relevant for your company?
2. Why do you consider them cost drivers?
3. Based on your company's publicly available financial information and other publicly available information about your company's operations, determine what sort of indirect costs your organization has and why.

I cannot find much public information but am willing to change to another company that has public information available to be accessed.

Solution Preview

Hi,

Interesting assignment and choice of company! I located some information that should get you started. I also attached some extra resources and active links for further research of your company.

Let's take a closer look.

RESPONSE:

1. Based on publicly available information for your company, can you discern what the cost drivers are for your company? If you can, what are they? If not, what cost drivers do you believe are relevant for your company?

A wide set of definitions of cost drivers can be used:
· A measure of the quantity of resources consumed by an activity
· Those factors responsible for variation in the cost of an activity
· A measure of the benefits received
· A measure of how often activities are performed and the effort involved in carrying them out (an activity driver - e.g. labor, the number of employees or management staff). http://www.jcpsg.ac.uk/guidance/part3_d1.htm

Also see attached resource on activty-based costing.

As Wal-Mart, the corporate behemoth, advances to surpass the annual sales revenue of General Motors, indeed a number of adversaries tries to block its path. The company has both direct and indirect cost drivers. Human rights advocates, for example, condemn the poor working conditions of foreign factories producing goods for Wal-Mart (indirect cost driver - costs less to run these factories). But third world governments want these factories for employment and manufacturing development. Wal-Mart's growth and profitability ...

Solution Summary

By example, this solution explores the cost drivers at Wal-Mart. It also provides links and an article on Wal-Mar'ts publicly available financial information for the companies operations..

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