Students Corner - 24
Gross Domestic Product (GDP)
The scope of
logistics has grown enormously beyond its original association with the
movements of military troops. As we said, the spirit of logistics lies in
movement which is a process. A process
is a series of consequent actions moving towards a specific goal. Logistics in
essence deals with the movements of goods and services from the places of
origin, of production to the places of consumption.
It must have
been clear by now that logistics is an inevitable tool of business and trade
which solely rely on the production, distribution and consumption of goods and
services. Living we know implies consuming goods and services. Simple as it
appears, it says some fundamental facts of living, both personal and
professional which includes all the means of earning money to survive, to say
the least. Right kind of food at the right time indicates basic physical
necessities; getting them in time with no problem is an index of physically
good state of being. Being able to produce
them and provide them to the needy with no problem ever is an index of
commercial viability of a society. Both the processes are inseparable for a
general living. The first one deals with physical health of human beings and
the second one deals with economic health of the society which is only the
total number of human beings living at a given period. Logistics is mainly
concerned with the economic condition of a society, economic ‘health’ of a
What are the
measures of social economic status?
Traditionally, the measure of economic and social development has been
what is called the Gross Domestic Product (GDP). This GDP is a complex one and
it is not required now to go into all intricate dimensions of this parameter of
assessing economic and social development.
Let us look at the general aspects of GDP.
GDP stands for
total monetary value, the market value of all the finished goods and services
produced in a given period. If there are 100 people in a society, for example,
and each one is able to produce goods or provide service worth Rs 100 per day,
then, the GDP of the society for a week will be 100 x 100 x 7 = 70,000.
Usually, GDP is compared for a year; but, now, comparison is made for a quarter
or half-yearly. The GDP of the society
for a week is considered to have grown if the total market value happens to be Rs
77,000. It has registered 10% growth.
Negative records are also possible if the GDP decreases. Increase in GDP is said to reflect growth in
the economy of the society and decrease in GDP is said to reflect downward
trend of economy of the society.
production and distribution of the products to the consumers have been carried
out efficiently, the value of the business, the trade is effective and productive;
it means efficient logistics brings in effective trade. So, it is easy to see
the connection between logistics and the economy of a society.
On the same
line, there is GDP of the nation also and by extension there is international
GDP for consideration. We will look into
the GDP of a country and the details thereof in our next session.