In Class, 15–20 Minutes for Teams An efficient logistics system can enable companies to ensure that their products are delivered to the right wholesalers and retailers at the right time, facilitating better supply to the end consumer. Logistics can also provide a competitive advantage, as firms can create a lower underlying cost structure, which can deliver either an increased profit margin or lower prices to consumers.

Think about different supermarket chains that you have visited. Are there some chains that usually have all their products in stock and other chains (or smaller stores) that frequently experience stock-out situations?

In addition, think about the different pricing practices of the supermarkets. Are there any supermarkets that sell brands that are similar to others but at a much lower price? If so, how do you think they’re able to do this? Do you think that their logistics system plays an important role?

Now let’s consider the potential impact frequent stock-out situations would have on potential consumer behavior. Think about this consumer behavior change from the viewpoint of both the retailer and any brands that are regularly stocked out.