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:

Win-lose Approach

A competitive strategy that focuses on achieving a victory or advantage at the expense or loss of the opponent.

Confrontation

A face-to-face encounter, typically involving conflict or a dispute between individuals or groups.

Problem Solving

The process of identifying an issue, obstacle, or challenge, and finding an effective solution to overcome it.

Work Day

The period during which an employee is expected to carry out their job duties, typically defined by hours.