The movement of goods in and out of warehouses, distribution centers and final outlets like retail chains form an integral part of supply chain management. With the gradual demise of just-in-case inventory management and the arrival of the just-in-time inventory concept, the logistics operations have become critical, and form the backbone of production and distribution operations.
The function of logistics is to provide auxiliary service along the value chain of a product, by transporting the product to different locations for value addition, storage and final consumption. This function assumes significance in light of companies moving their manufacturing locations across different parts of the world for competitive cost advantages. Furthermore, the concept of modular manufacturing and assembly at different locations has forced a strategic role upon logistics to deliver the goods in time.
The function of transporting goods is provided by transportation companies who have extensive fleets consisting of trucks, ships and planes. The ownership of oil tankers and other container carriers, and airplanes in the tourism and courier industries, involves huge costs. The...
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