Inflation has a lot to do with the cost of basic goods on the shelves. However, inflation isn’t the only factor that will affect the overall price of what consumers pay for their goods. Once you get past inflation, the second largest factor that affects consumer prices is transportation. Transportation is essential in the supply chain. Without transportation, goods aren’t going anywhere. When the price of transport goes up due to any factor, the cost of goods will naturally hike as a result of its effect on the supply chain. When warehouses and retailers pay more for goods transportation, consumers will pay more for their goods.
In the supply chain model, goods from a manufacturer or producer are sent for storage from where the goods are delivered to resellers or the end-user. Cross-docking is a supply chain model where businesses remove the storage link. By removing this link, cross-docking allows for the manufacturers of goods to deliver products straight to the customer without having to go to a storage facility or warehouse first. This practice is beneficial cost and time-wise for both buyers and sellers.
The flow of goods is an important cycle of how goods and services flow from start to finish within the economy. At each stage of the flow, there is a movement of goods as well as a change in the monetary value of the products. It is a basic understanding of the movement of goods and how it contributes to the economy overall. To explain this process, we can divide it into three stages that simplify the movement of goods and what occurs during these different points of exchange.