One of the most misunderstood integrated logistics activities is inventory planning and inventory management. In an ideal world, no inventory would be required because manufacturers could exactly forecast demand and produce only that much. Unfortunately the world is not perfect and forecasts are not accurate. Firms must produce and store additional stock just in case to meet changing demand patterns. If firms could forecast accurately many integrated logistical activities would be unnecessary or have little effect on integrated logistic cost. Most warehousing would vanish. Packaging would protect less because the product would move from the plant to the customer with minimal handling. Material handling such as forklifts trucks, and conveyers would not be required.
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