TOTAL COST CONCEPT V/S TOTAL SYSTEM CONCEPT

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M.COM First Year Tutor Marked Solved Assignment

Course Code: IBO – 05
Course Title: International Marketing Logistics
Assignment Code: IBO-04/TMA/2019-20
Coverage: All Blocks

IBO – 05 International Marketing Logistics Solved Assignment for 2019-20

Q5.) Distinguish between the following :

(a.) Total Cost Concept and Total System Concept

Ans: In Total Cost Concept, various costs trade-off are considered 'collectively' and counterbalanced to attain optimum cost level while choosing various alternative courses of action with respect to product distribution. Whereas, the Total System Concept envisages integration of all components of the physical system which impact the market at the same time and work in synergy. The total system concept has been derived from the total cost concept and practically is the most commonly used concept.

Total Cost Concept requires or needs the management of supply chain for trade whereas, Total System Concept helps in minimizing the overall cost of logistics through identifying the activity grounded costs, which have an

impact after the tax profits.