Explain Why Once Revenue and Total Logistics Costs Are Considered

question 71

Essay

Explain why once revenue and total logistics costs are considered together, the optimal number of facilities in a distribution network may well increase compared to the optimal number of facilities based on total logistics costs only. Include details about the behavior of relevant cost and revenue elements.

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Definitions:

Future Outcome

An event or result that occurs later in time, often as a consequence of actions taken in the present.

Forecasts

Predictions about future events, conditions, or trends based on current data or analysis, used to assist in planning and decision-making.

Shortsighted Emphasis

A focus on immediate outcomes without considering long-term implications.

Organizational Strategy

A plan devised by an organization to achieve long-term goals and sustain competitive advantage.