As others have correctly pointed out, this is a system where bottlenecks and capacity matter, not the individual movement of any given quantity of supply. On a strategic level, tracking the production and consumption of supply from N producers (cities, per your example) would be chaotic, as well as computationally prohibitive.
Importance was placed where
@podcat and I felt that it
mattered - you as a commander should be concerned with taking key points, protecting supply lines, and not overburdening hubs - not managing hundreds of sub-networks and running a tycoon game in the background.
On the topic of supply hubs: these have been the source of some debate, internally. As has been noticed, the cost of these is unusually high. This is because they sidestep having to care about the factors mentioned above - namely, taking key points, protecting supply lines, and not overburdening hubs. I do not want the solution to a poor supply situation to be the construction of additional hubs - it is the 'nuclear option', and exists for dire circumstances, or in the creation of well supplied, fortified lines.
The intended gameplay loop here is to make the player reconsider their tactical approach to a situation: if you are struggling to supply your troops on a frontline, you can improve the railway connections to already present hubs, remove some supply-heavy units, aim to capture additional enemy hubs, or use air supply (yes, it looks like air supply may be in need of a bit of attention). If you can just build your way out of every situation, we didn't really succeed in making supply a strategic concern at all.
Overall, it seems you may want the system to represent the
productive supply issues faced by the major powers in ww2. That is not unreasonable, but it is already partially covered by the equipment subsystem. It is also not what we set out to create with this supply system - here we built a system to represent
logistical supply concerns with key interaction points for the player.
At the end of the day, if people are already considering this system to be more complex than before, I'm not sure what good it would have done to go even further and simulate the exact production, travel, and consumption or every piece of ammunition/supply.