Chapte 2

Question 1

aims to treat the many different elements that come under the broad category of distribution and logistics as one single integrated system.

Answer 1

TOTAL LOGISTICS CONCEPTS (TLC)

Question 2

is a situation that involves losing one quality or aspect of something in return for gaining another quality or aspect.

Answer 2

TRADE OFF

Question 3

those trade-offs that occur within single functions

Answer 3

Within distribution components

Question 4

there are a number of areas of interface between company functions where trade-offs can be made

Answer 4

Between company functions

Question 5

those trade-offs between the different elements in distribution

Answer 5

Between distribution components

Question 6

One example would be the decision to use random storage locations compared to fixed storage locations in a depot. The first of these provides better storage utilization but is more difficult for picking; the second is easier for picking but does not provide such good storage utilization.

Answer 6

Within distribution components

Question 7

One example is the trade-off between optimizing production run lengths and the associated warehousing costs of storing the finished product. For example, a company might increase the strength and thus the cost of packaging but find greater savings through improvements in the warehousing and storage of the product (i.e. block stacking rather than a requirement for racking).

Answer 7

Between distribution components

Question 8

One example is the trade-off between optimizing production run lengths and the associated warehousing costs of storing the finished product. Long production runs produce lower unit costs (and thus more cost-effective production) but mean that more product must be stored for a longer period (which is less cost-effective for warehousing).

Answer 8

Between company functions

Question 9

For example, a change from a manufacturer’s products being delivered direct to a retailer’s stores to delivery via the retailer’s distribution depot network might lead to a cheaper solution overall for the two companies

Answer 9

Between the company and external organization

Question 10

FOUR DIFFERENT LEVELS OF TRADE-OFF

Answer 10

Within distribution components
Between distribution components
Between company functions
Between the company and external organization

Question 11

should be undertaken according to a certain hierarchy that reflects different planning time horizons.

Answer 11

Planning

Question 12

a set of procedures for making decisions about the organization’s long-term goals and strategies.

Answer 12

Strategic

Question 13

have a strong external orientation and cover major portions of the organization.

Answer 13

Strategic plans

Question 14

Medium to long-term horizon, 1 to 5 year (plus) time span, overall ‘structural’ decisions, trade-offs between company functions, trade-offs with other organizations, corporate financial plans and policies, policy decisions developed into strategic plan.

Answer 14

Strategic

Question 15

a set of procedures for translating broad strategic goals and plans into specific goals and plans that are relevant to a distinct portion of the organization, such as a functional area like marketing.

Answer 15

Tactical

Question 16

focus on the major actions a unit must take to fulfil its part of the strategic plan.

Answer 16

Tactical plans

Question 17

Short to medium-term horizon, six-month to 1year (plus) time-span, subsystem decisions are made – should not impose on other logistics components, Annual budgets provide finance/cost basis, corporate financial plans and policies, the strategic plan detail is made into an operational plan.

Answer 17

Tactical

Question 18

the process of identifying the specific procedures and processes required at lower levels of the organization.

Answer 18

Operational

Question 19

The planning model we have been describing is a hierarchical one, with top-level strategies flowing down through the levels of the organization into more specific goals and plans and an ever-more-limited timetable.

Answer 19

Operational

Question 20

day-to-day decision making, operations controlled against the standards and rules, control via weekly/monthly reports. The implementation of the operational plan.

Answer 20

Operational

Question 21

is about ensuring that the operation is set up to run properly – it is ‘doing the right thing’ or preparing for and planning
the operation ‘effectively’.

Answer 21

Planning

Question 22

is about managing the operation in the right way – it is ‘doing the thing right’ or making sure that the operation is being run ‘efficiently’.

Answer 22

Control

Question 23

PLANNING FOR DISTRIBUTION AND LOGISTICS

Answer 23

STRATEGIC
TACTICAL
OPERATIONAL

Question 24

customer service, channel of distribution, supply points, production locations, location and size of depots, transport modal choice, third party or own account, direct delivery and stock level

Answer 24

STRATEGIC

Question 25

vehicle types/sizes/numbers, contract hire, delivery schedule, design and layout, space allocation, handling methods, stock location and control, and documentation.

Answer 25

TACTICAL

Question 26

goods receipts and checking, bulk storage, order picking, stock replenishment, order marshalling, load scheduling, returns, and vehicle maintenance.

Answer 26

OPERATIONAL

Question 27

system-wide management of the entire logistics chain as a single entity, instead of separate management of individual logistical functions.

Answer 27

Integrated logistic

Question 28

To support the need to develop more integrated operations there have been a number of developments in logistics and distribution systems that have the concept of total logistics as their basis. First, realization of the importance, cost and complexity of logistics. Second, is the progress made in the field of information technology, which has enabled the development of sophisticated information systems to support and enhance the planning and management of logistics operations, whereby very detailed data collection and analysis can be undertaken that was previously impossible.

Answer 28

Integrated logistic

Question 29

is a technique of allocating all of the appropriate costs and allowances to a given product.

Answer 29

Direct product profitability (DPP)

Question 30

techniques can identify the costs of specific products to individual customers and so provide invaluable information for effective marketing strategies.

Answer 30

Direct product profitability (DPP)

Question 31

are systems that have been developed as sophisticated, computerized planning tools that aim to make the necessary materials or inventory available when needed.

Answer 31

Materials requirements planning (MRP) and distribution requirements planning (DRP)

Question 32

is a system for calculating the materials and components needed to manufacture a product

Answer 32

Material requirements planning (MRP)

Question 33

consists of three primary steps of Material requirements planning (MRP)

Answer 33

- taking inventory of the materials and components on hand, - identifying which additional ones are needed, - and then scheduling their production or purchase.

Question 34

It consists of three primary steps: taking inventory of the materials and components on hand, identifying which additional ones are needed, and then scheduling their production or purchase.

Answer 34

Material requirements planning (MRP)

Question 35

is an integrated information system used by businesses.

Answer 35

Manufacturing resource planning (MRP II)

Question 36

It evolved from earlier materials requirement planning (MRP) systems by including the integration of additional data, such as employee and financial needs.

Answer 36

Manufacturing resource planning (MRP II)

Question 37

is a process of determining the right amount of manufactured goods to be shipped to each distribution center or warehouse in order to satisfy customer demand.

Answer 37

DRP- Distribution requirements planning

Question 38

originated as a new approach to manufacturing and has been successfully applied in many industries such as the automotive industry.

Answer 38

Just-in-time (JIT)

Question 39

to provide a production system that eliminates all activities that neither add value to the final product nor allow for the continuous flow of material – in simple terms, that eliminates the costly and wasteful elements within a production process.

Answer 39

Just-in-time (JIT)

Question 40

The objectives of JIT are vitally linked to distribution and logistics, including as they do:

Answer 40

- the production of goods the customer wants; - the production of gods when the customer wants them; - the production of perfect-quality goods; - eliminating waste (labor, inventory, movement, space, etc.)

Question 41

is the monitoring and optimization of the production and distribution of a company’s products and services.

Answer 41

Supply chain management (SCM)

Question 42

It seeks to improve and make all processes involved in turning raw materials and components into final products more efficient and getting them to the ultimate customer.

Answer 42

Supply chain management (SCM)

Question 43

Effective ____________ can help streamline a company's activities to eliminate waste, maximize customer value, and gain a competitive advantage in the marketplace.

Answer 43

Supply chain management (SCM)

Question 44

5 Phases of Supply Chain Management (SCM)

Answer 44

1. Planning 2. Sourcing 3. Manufacturing 4. Delivery 5. Returns