Total Cost In Logistics

855 Words4 Pages
In this concrete jungle, a process which satisfying customers’ demands are of critical importance to any parties has been a growing recognition. These processes are the means whereby products are developed manufactured and delivered to customers and through which the continuing service needs of the customers are met. The logistics concept is the thread that connects these crucial processes and provides the basis for the design of systems that will cost effectively deliver value to customers. Thus logistics management is essentially an integrative process that seeks to optimize the flow of materials and supplies through the organization and its operations to the customer. It is a planning process and an information based activity.
Total Cost
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Budgeting which is an essential part of the logistics planning process can now seek help from the useful Logistics accounting information. Moreover, the information can be used to allocate resources for implementing the plans. With the use of Logistical Costing, logistics accounting system mainly allows the user to analyze decisions. The Total Cost is one of the many concepts in logistics. Customer has been labelled as the King of the market today in the marketing view point of any business. Thus at whatever cost, the firms must satisfy the customers. Above that, customer service which is important has grown day in and day out. As a result, good customer service is required to retain customer’s satisfaction. By that it needs an updated and latest logistics system. At times large portion of the total cost incurred by the firm because of the huge investments needed for the new logistics system. In that case, different costs are incurred in maintaining and developing successful and effective logistics systems. Transportation Costs is one of the cost incurred. Generally with the speed with which goods are transported cause the cost to vary. Air transport is…show more content…
System approach allows to take into consideration a lot of interdependent phenomena and to organize complex logistic movement. Many assumed goals, which, when integrated, complete a single complementary task was allowed by the logistic system for attainment. The jobs that are accomplished by logistics management using the system approach is the coordination of raw material flows and material, reducing the costs that are related to the flows and lastly subjection of logistic works to customer satisfaction. There are two fundamental groups in the aims of logistics system. Supporting the demand fulfillment on the market, taking into concern of the optimal costs is the first group also knows as general aim. The characteristic of the second group are the individual objective: considered in the scale of the whole organization, but also those, which are created and assessed by the customer. Most importantly the goals are to shape the optimal structure of values and cost level as well as identification and putting into operation the efficiency potential of the logistic system. Strengthening and improvement of the position of the firm on the market solely depend on all of the positive aspects of the system. The competitive advantage of the firm will increase. The economic changes occurring around that organization will affect
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