When depreciation and loss costs are excluded from the logistics cost, the transportation cost is reduced dramatically; however, the main cost for all types of farms is still material handling.
When considering the cost versus the type of farm, we found that the procurement cost and customer communication cost are reduced when the size of the farm is larger.
On the other hand, for larger farms the inventory cost is larger.
The material handling cost of medium-sized farms is highest, compared to small- and large-size farms.
Medium-sized farms outsource labor for harvesting, grading and packing the produce, but do not have the advantage of economy of scale that large-sized farms have; whereas small-sized farms perform most of their handling activities using their own family labor.