Passage 1 Logistics system A logistics system consists of different functions and activities, such as the following: 1. Customer service. It is a core function in the logistics process. Each business entity should have a customer service department to handle complaints, special orders, loss and damage claims, returns, bills problem, etc. This function becomes crucial because any dissatisfaction can lead to failure to retain customers. 2. Inventory management. It is to maintain the stock of raw materials and half-finished products. In order to satisfy the customers5 demand and minimize costs, a company should establish an optimal level of inventory to meet the market demand that exceeds the company leader's expectations, and at the same time, minimize the inventory holding costs and inventory write-down costs. 3. Transportation. It has taken a great role in many logistics systems for two reasons. First of all, globalization and importing-exporting activities make it necessary for most products to be transferred from one country to another. Secondly, information revolution has propelled the manufacturing process and consumer behaviors to be changed drastically. Traditional transportation methods need to be upgraded to accommodate modem transportation demand, therefore, containerization and usage of information sharing system emerge. 4. Storage. It is needed to manage the materials and store ready-for-market products in warehouses. There is new technology applied in the storage, for example, automatic warehouse. Old-fashioned warehouses have become the distribution centers where container trucks deliver and pick up the goods. 5. Information system. It links all logistics processes and integrates all information to ensure all the handling of large quantity of goods is delivered in an efficient, cost-effective and accurate manner.