A Discriminant Analysis Model for Supply Chain Transaction Cost

As an important part of supply chain costs, transaction cost has not been considered much in traditional cost accounting. In the past, transaction cost of purchasing was contained in material or fixed asset cost at recognition and initial measurement. Then, it was gradually apportioned to income statement. However, transaction cost of sales was directly charged as expense of this period. With huge development of enterprises relationships in supply chain, the method of cost accounting above is inapplicable. We put forward in the essay that transaction cost of purchasing material should be treated in the same way as transaction cost of sales, in which the cost is separated from inventory cost and directly figured as expenses. In this paper, a linear discriminant analysis classification model based on Mahalanobis distance is constructed to justify the theoretic analysis. And financial data of a representative manufacturing corporation is studied. The results validate our point of view on transaction cost of purchasing material, and furthermore, lay the foundation of constructing new cost accounting system in supply.