The purpose of this hierarchical categorisation is twofold.
First, it is consistent with the existence of an organisational
structure within a firm, where each level of the
organisation deals primarily with one of the levels of
decisions outlined above. Second, the separation of the
overall decision-making process into various stages (levels)
makes the planning, design and operation of a logistics
system tractable. It should be noted however that an
interdependence exists not only among decisions within
any given level, but also between decisions at different
levels. Higher-level decisions often determine the
boundaries for decisions in subsequent levels. On the
other hand, evaluating higher-level decisions requires
managers to consider the expected outcome of lower-level
decisions.