Logistics management: A method for evaluation of production-distribution investments

Logistics management affects all major functions or departments within the firm beginning from the raw material deliveries and ending with the deliveries of finished goods. One of the key problems with the logistics management is the issue of investment decisions. The first key idea of this study is that traditional techniques of investment analyses are not comprehensive enough but every stage in the investment process needs to be supported by appropriate computerized methods. The second major aspect is that a firm has several strategies for arranging its logistic operations and that the effects of these strategies need to be evaluated using multiple, diversified criteria-not just cost minimization. In this study, the authors discuss the logic of integrated investment analysis and its implementation with a computerized tool. Each step of the proposed procedure is described in detail with an example to assist logistics management in selecting the most efficient logistic system for the whole corporation.