Quantifying and modelling logistics at business and macro levels

This paper attempts to bridge the gap between business and macroeconomic logistics; most often these are kept separate, and decision-makers are faced by troublesome paradoxes. For example, at the macroeconomic level logistics is still treated as a transfer cost with no significant impact on global equilibrium values. Economics remains curiously spaceless, according to some authors. On the other hand, business logistics is an expanding field and has brought significant contribution to the debate. Some techniques have become so standard that they are now included in most operations research textbooks. This paper attempts to show that micro effects defined in the literature, cannot but have a serious aggregate effect on the economy. ‘Bad’ logistics may in fact be an important variable explaining economic inefficiencies in poorer countries. It may not be a coincidence that there are large and small poorer countries but they all share the same difficulties in moving things around.