Logistics Test 1

Supply chain management 3 major areas
1. Sourcing or Purchasing/Procurement
2. Manufacturing Operations
3. Logistics
Third party logistics
Return on assets
Logisitics tradeoffs
Inventory, transportation, location/facility analysis
4PL manages a 3PL.
Names for logistics
Logistics mgmt, business logistics, ect…..
Economic utilities
Form utility(what)….
Logistics activities
transportation, storage, packaging, materials invoicing…
7 modes of transportation
railcar, airplan, rail, motor carrier, human-powered, animal powered
Dynamic Analysis formulas
TC = FC + VC
VC = var/unit * Q
P = TR – TC
TR = Rev/unit * Q
TC1 = TC2
P1 = P2
FC1 + VC1 = FC2 + VC2
two sets of coordinates for the answer
Not enough inventory
Lost sale, switch brand, switch retailers, create urgency to purchase inventory
Too much inventory
perception of limited demand, lower price, oppurtunity cost, obsolete, obsolete/spoil, pilferage
Total system cost
physical distribution concept and focused upon the outbound side of the firm’s logistics system
Focused upon the physical distribution or outbound logistics was logical since finished goods we usually higher in value
Value chain
Value chain contributing value to the firms customers and making the company financially viable. The more integrated nature of marketing, sales, and manufacturing with logistics is also an important dimension of the value chain.
Pull system
Pull it through the supply chain in response to demand
landed cost
The focus had to be upon the cost at the end of the supply chain which is the total cost.
Logistics (other names)
1. Logistics
2. Business logistics management
3. Integrated logistics management
4. Materials management
5. Physical distribution
6. marketing logistics
7. Industrial logistics
8. Distribution
Value added role of logistics
1. Form utility – assembly and manufacturing
2. Place utility – moving goods
3. Time utility – goods must be available when customers need them
4. Possession utility – Promotion of services
Pull strategy
Products are pulled through the supply chain with national advertising
Push strategy
Cooperate with the channels of distribution to stimulate customer sales
Transportation trade-off
inventory management and warehousing
Balanced System
Balanced flow on inbound and outbound sides of their logistics systems.
Heavy Inbound
Very heavy inbound flow and a very simple outbound.
Heavy Outbound
A wide variety of industrial and consumer products are produced that need storage, packaging and transportation to the final customer.
Reverse Systems
This is true of companies producing durable products that the customer may return for trade-in, for repairs, or for salvage and disposal. Works with used products.
Logistics channel
the work of intermediaries engaged in transfer, storage, handling, communication and other functions that contribute to the efficient flow of goods.
Demand management
focused efforts to estimate and manage customer demand.
4 Economic Utilities
Form utility,Place utility, Time utility, Possession utility
Seven R’s
Right Product, Right Quantity, Right condition, Right place, Right time, Right customer, Right cost
Types of systems
Balanced system,Heavy inbound, heavy outbound, reverse system
Four possible outcomes of a stockout
Customer wait, back orders, lost sales, lost customers
Materials Management
1. Determine the type of purchase
2. Identify the type of purchase
3. Perform the procurement process
4. Evaluate the effectiveness of the procurement process.
Types of Costs
1. Traditional basic input costs
2. Direct transaction costs
3. Supply relational costs
Inventory Costs
Order costs,Setup costs

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