ABSTRACT
This chapter outlines the structure of the DuPont model and gives examples of the influence that logistics can have on the return on investment. It explains why the contribution margin analysis can remove an important objection to the ABC analysis. The chapter aims to calculate with the ABC analysis and contribution margin analysis and motivate why a combination of both may be the best solution. It also explains relationship between inventory management and demand forecasting. The chapter discusses a number of basic logistics tools. Logistics focuses primarily on the management of the flow of goods. Inventory is an important focal area in logistics, in production companies as well as in trading or distribution companies. Market expansion or market development is offering existing products in new markets. Even though this may cause a company’s market share to increase, it goes without saying that this will be coupled to an increase in logistics costs.
