Logistics as One of the Most Essential Components in the Economy - Assignment Example

It also contributes to utility, based on its ability to make the product be in a form in which the customer can use it. For example, logistics can contribute to production economies, such as lowering the cost per unit. The economic impact of logistics can also be seen in place utility, where it helps in the movement of products from one place to another (Bowersox et al 3). Q 2. A reduction in economic regulation has enabled companies to specify various logistics service levels; therefore, adjusting prices accordingly.

It also enabled those who buy transportation services in large quantities to reduce costs on transportation. Reduction in Economic regulation also allowed individual carriers to have the flexibility to pricing and provision of services (Bowersox et al 6).Q 3. The five activities that might be part of a company’s logistics department include customer service, which entails keeping customers satisfied and ensuring that they get the right product. The department may also consist of demand forecasting; this includes estimating the future demand of a product (Bowersox et al 18).

Facility location decisions may also be part of a logistics department; this relates to the location of production and warehousing facilities. The fourth activity entails inventory management; logisticians have to consider ordering cost, holding cost, and costs caused by running out of stock. Procurement should also be part of a company’s logistics department; this relates to the acquisition of supplies and raw materials needed for production (Bowersox et al 19).