Question

can you show me your explaination for this figure please.

can you show me your explaination for this figure please.
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Answer #1

This is a matrix which is telling the relationship between product price and the product value density. It describes the product market factors and priorities in logistics strategy formulation. There are 4 cases which can arise in the market which are :-

1. High product price and low product value density

In this case the cost is low as the product value density is low so there is less expense on the maintenance of the products. The price of the product is high so regional logistic system is used in which the product are supplied fully near the customers. The products are easily available to the customer.

2. High product price and high product value density

When the price of product is high and the value density is also high then the product is very special and need to be taken care. High product density result in high price. The product is not easily available to each and every corner. The distribution and production are extensive in nature. The products are globally centralized.

3. Low product price and low product value density

This is a very rare combination when the product value density is also low and the product price is also low.

4. Low product price and high product density

In this case when product value density is high but the price of goods is low then there is a high level of customer service requirement in the local operations.

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