Logistics and Supply Chain Management, 4th Edition

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The costs of satisfying customer demand can be significant and yet, surprisingly,

they are not always fully understood by organisations. One reason for this is that

traditional accounting systems tend to be focused around understanding product

costs rather than customer costs. Whilst logistics costs will vary by company and

by industry, across the economy as a whole the total cost of logistics as a propor-

tion of gross domestic product is estimated to be close to 10 per cent in the US

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and in other countries costs of similar magnitudes will be encountered.

However, logistics activity does not just generate cost, it also generates revenue ...