Developing a highly efficient logistics system requires managers to consider a
number of issues. Often a tradeoff is necessary between the need to reduce overall
supply chain inventory and lead times, and the opportunity to capture economies
of scale in logistics functions such as warehousing and transportation. Such a
tradeoff becomes considerably complicated due to the increasing uncertainty that
plagues global supply chains. This randomness typically arises due to variability in
supplier, manufacturing and demand processes. However, other stochastic effects
relating to climate change, conflicts in particular countries/regions of the world
and global health issues can greatly impact supply chains, resulting in serious
disruptions.