Logistics- Chapter 7- Demand Management, Order Management and Customer Service

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demand management
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the creation across the supply chain and its markets of a coordinated flow of demand -demand (sale) forecasting- project future demand
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make to stock
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when finished goods are produced prior to receiving a custom order
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make to order
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when finished goods are produced after receiving a customer order
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three types of demand forecasting models
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1. judgmental 2. time series- simple moving averages and weighted moving averages 3. cause and effect
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judgmental forecasting
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-uses judgment or intuition and is preferred where there is limited or no historical data -used with new product introduction -uses surveys and analog time –> similar item compares
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time series
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-future demand is solely dependent on past demand
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simple weighted average
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sum demand across different time periods and divide by number of time periods
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weight moving average
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recent upturns or downturns in demand
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cause and effect (associative) forecasting
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assumes one or more factors are related to demand and the relationship between cause and effect can estimate future demand
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forecasting accuracy
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relationship between actual and forecasted demand
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CPFR (collaborative planning, forecasting, and replenishing)
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supply chain partners share planning and forecasting data to better match up supply and demand -not all have been successful -significant challenges associated with getting supply chain partners to share relevant data to develop forecast -emphasis on computer software
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Order Management
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various activities associated with order cycle
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order cycle
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when customer places order and when order is received
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order to cash cycle
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length of time it takes organization to receive payment for an order -cycle time variability and advances in information systems affect this
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order transmittal
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when customer places an order until seller receives order five forms: in person, telephone, by mail, by fax machine and electronically
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order processing
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time from when seller receives order until an appropriate location (such as warehouse) is authorized to fill the order
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order triage
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classifying orders according to reestablished guidelines so company can prioritize how orders should be filled
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order picking and assembly
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all activities from when appropriate location is authorized to fill order until goods are loaded aboard outbound carrier
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voice based order picking
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use of speech to guide order picking activities
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pick-to-light technology
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orders to be picked are identified by lights placed on shelve’s racks
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order delivery
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time from when transportation carrier picks up shipment until received by customer
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customer service
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ability of logistics management to satisfy users in terms of time, dependability, communications and convenience
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order fill rate
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percentage of orders that can be completely and immediately filled from existing stock- one way of measuring completeness of delivery
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multichannel marketing systems
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separate marketing channels to serve customers ex: buy online, pick up in store
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benchmarking
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process that continually identifies, understands and adapts outstanding processes found inside and outside organization
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performance benchmarking
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compares quantitative performance
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process benchmarking
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qualitative in nature and compares specific processes
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customer profitability analysis (CPA)
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allocation of revenues and costs to customer segments or individual customers to calculate the profitability of segments or customers -uses grouping -ABC analysis (high rev/high costs, high rev/low costs, etc)
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service recovery
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a process for returning a customer to state of satisfaction after a service or product has failed expectations

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