•Applying Pareto’s principle, firm’s 20%   of all products marketed account for more than 80% of total profits.
•Offer high availability and consistent delivery on more profitable products, though sometimes high –level support of less profitable items becomes necessary to provide full-line service to core customers.
•Not advisable to provide high service performance on less profitable products purchased by non core customers.
•Thus, it may be desirable to hold slow-moving or low profit items at a central distribution warehouse whereas core customers may be served by fast, reliable air services.
•Orders to fringe customers may be delivered by less expensive ground transportation.
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