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Factors Affecting the Cost and Importance of Logistics?
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  • Competition via customer service
  • Order Cycle
  • Shorter order cycle, less inventory required
  • Substitution
  • More substitutable product, higher customer service level required
  • Inventory Effect
  • Increase inventory, reduce cost of lost sales
  • Transportation Effect
  • Increase transportation costs, reduce cost of lost sales
  • Product factors
  • Dollar Value - product value increases, cost of warehousing, transportation and inventory increases
  • Density- higher the density, more efficient use of warehouse and transportation space
  • Damage -greater the risk of damage, higher the transportation and warehousing cost
  • Special Handling Requirments
  • Spatial Relationships
  • Distance Factor
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