THE TOTAL COST VS. TOTAL PROFIT APPROACH TO LOGISTICS DESIGN

From the inception of the physical distribution concept in the 1950s when it was regarded as a passive back-up function for cost control, logistics systems are now viewed by management as powerful competitive tools for increasing customer demand and satisfaction. With few exceptions, it is claimed that the Total Cost Approach is outmoded for designing modern consumer-oriented logistics systems. This paper advocates a shift in emphasis from the Total Cost Approach under certainty to a Total Profit Approach under conditions of risk. It reflects the belief that management operates within a risk environment where Physical Distribution Management might better be identifed as Profitable Distribution Management.

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  • Corporate Authors:

    American Society of Traffic and Transportation

    547 West Jackson Boulevard
    Chicago, IL  USA  60606
  • Authors:
    • Poist, R F
  • Publication Date: 1974-9

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Filing Info

  • Accession Number: 00072467
  • Record Type: Publication
  • Files: TRIS
  • Created Date: Dec 13 1996 12:00AM