ABSTRACT

In an effort to market its air cargo service more effectively KLM decided to develop a system whereby they could help their international clientele to calculate the true value of their distribution. The underlying aim was to compare the total cost of distribution based on air freight as against other means of transport, KLM recognised that although air cargo may appear more expensive than other means of transport such as shipping, if one takes the total cost including packing, documentation, insurance, handling, inventory carrying charges, etc. air freight can yield important savings in many areas. They further realised that such comparisons are quantitative and lend themselves to accurate analysis.