The amount of the product-turnover is most of the time direct in relation with the profit, which situation is shown in the next figure with the elements:
With a money-taken of $50.000 and expenses of $45.000 there is a profit of $5.000 or (50.000 : 5000) *% = 10% . If one element changes then the whole relationship changes, which means that a retrench in one generates a retrench in the other. The logistic costs are for instance in relation with costs of transport, which can be reduced by a good planning for distribution. Such a planning needs an overview in the traject of the product trough the whole productionline. If it is possible to reduce the costs of logistics with 10%, then the total profit grows to 20%. An important part of the investment is the supply of material and (after production) the goods for sale. Also in this part of the planning it is important to reduce the costs, what brings the implication of a good planning of capacities. Every good planning is based on the experience in production and archived in administration about production in the past. There are existing a few computerprograms for this job, for instance MRP1 , the MANAGEMENT REQUIREMENTS PLANNING. It gives you an overview of the deliveries and material as well as the inventory on a longer term. You can find more explanation about this tool in the paragraph production.
The next pages treats more the route and sections which information
has to go in a well structured economic organization. Every company, it
does not matter if it is operating on small or on big scale, brings a certain
complexity with input/output of information, which is better to handle
with a transparent planning in the economic organization.