The Logistic Factor in the Transformation of the Theoretical Principles Underlying the Functioning of Commodity Markets

Abstract

The influence of the logistic factor on the transformation of the theoretical principles underlying the functioning of commodity markets is investigated. First of all, this concerns certain provisions of the theory of market equilibrium and the theory of competition. It is concluded that the logistic factor allows not only to reveal the influence of its individual components on the postulate of the market equilibrium theory about delayed response of supply to changes in product prices but also to minimize the time to achieve equilibrium. The components of the logistic structure should include warehousing logistics, distribution logistics as well as the integrated logistics concept of 7Rs. There developed a modified Evans’ mathematical model, the analysis of which has demonstrated the possibility of the influence of logistic structures on market processes in order to minimize the time to achieve the equilibrium price. The logistic component of product distribution introduces certain adjustments into the modern concepts of the theoretical principles underlying the functioning of the market environment, in particular, the motivational component of eliminating competition depending on the market share of commodity producers. The authors’ hypothesis on this issue is that the opportunities for producers in the competition will be more differentiated due to using providers of logistical services of different levels, while the weight of market shares as a motivational component of competitive relations will decrease. The performed monitoring of the logistics services market has made it possible to single out a promising level of development of logistics services related to the provision of comprehensive logistics services, primarily, 3PL.

Keywords

• logistic factor
• theoretical principles
• market equilibrium
• modified evans’ mathematical model
• market competition
• commodity market