In international logistics, there are three main concepts: system concept, total cost concept and tradeoff concept. Use Nestle as an example to describe each of these three concepts.

There are three major concepts within logistics: the systems concept, the total cost concept and the trade-off concept. The systems concept is based on the notion that materials flow activities within and outside of the firm are so extensive and complex that they can be considered only in the context of their interaction. It stipulates that some components may have to work sub optimally to maximise the benefits of the system as a whole. In order for the systems concept to work, information flows and partnership trust are instrumental. Long-term partnership and trust are required in order to forge closer links between firms and managers. An outgrowth of the systems concept is the total cost concept. To evaluate and optimise logistical activities, the total cost concept is to minimise the firm's overall logistics cost within the entire system. Its implementation requires that the members of the system understand the sources of costs. Activity-based costing is a technique designed to more accurately assign the indirect and direct resources of an organisation to the activities performed based on consumption. 22 In the international arena, the total cost concept must also incorporate the consideration of total after-tax profit by taking the impact of national tax policies on the logistics function into account. The objective is to maximise after-tax profits rather than to minimise total cost. The trade-off concept recognises the linkages within logistics systems that result from the interaction of their components. For example, locating a warehouse near the customer may reduce the cost of transportation. However, the new warehouse will lead to increased storage costs and more inventory. Managers can maximise performance of logistics systems only by formulating decisions based on the recognition and analysis of such trade-offs. Nowadays, the logistics manager must be conscious of the distance goods have to travel in terms of their carbon footprint as consumers become more and more concerned with this issue.