Tag Archives: batch level

Batch-level costs

Definition:
Batch-lever costs arise from activities performed once for each batch or lot of products. For example, machine setups, cleanup, moving the batch to the next step in the production process depend on the number of batches rather than the number of units in each batch. Purchase orders and inspections are also examples of batch-level activities. These costs occur for each batch, independent of how many units are in the batch.

Calculation:
Sum of all types of costs from activities performed for a batch

This KPI is measured as: Financial Value (e.g. €, $)

Interpretation of results: Lower Is Better

Strategic objective:
Increase profitability