Application of the Activity-Based Costing Model for Cost Planning in Reverse Logistics: A Case Study in Vietnam

In the context of the explosive growth of the e-commerce sector following the COVID-19 pandemic, the rate of product returns has significantly increased, posing a significant challenge for businesses in managing reverse logistics to enhance their competitive advantage. In addition to forward logistics costs, reverse logistics costs have become a major concern and constitute a significant portion of the overall logistics expenses. In this context, controlling and planning costs for the reverse logistics process has gradually become a focal strategy for current businesses, especially those involved in the e-commerce industry. This study aims to propose an activity-based costing (ABC) model to control and plan costs for the reverse logistics process to improve operational capacity, by applying it to an e-commerce business in Vietnam to highlight its effectiveness. The ABC model enables businesses to enhance their ability to identify, control, and planning costs, thereby serving as a crucial database for long-term strategic decision-making and improving operational efficiency in the reverse logistics process.