Problem:
Market logistics is a critical component of successful marketing strategy and a major cost element for company operations. The goal of market logistics is to provide a targeted level of customer services at the least cost. I need to assume I work for a large department store that operates 275 department stores across the US. As today's staff meeting the Chief Financial Officer asked whey the Marketing Department just doesn't use the least expensive option for each of the logistics activities (order processing) warehousing, inventory, and transportation). Assume my company wants to provide a high level of customer service. I need to briefly explain the relationship of the costs of the different logistics activities (for example, if I try to lower warehousing costs, what does that do for the order processing transportation , and inventory costs?)