Chapter 11 Flashcards
Logistics Management
management of the movement and storage of materials at lowest cost while still meeting customers’ requirements
Six Components of Logistics Management
Inventory Management Order Management Transportation Warehousing Packaging and Materials Handling Network Design
Cost-to-Service Trade-off
as service levels increase, typically so do costs
Cost-to-Cost Trade-off
increasing the cost of one logistics activity reduces the cost of another
Total Landed Cost
the sum of all product and logistics related costs
Economic Regulation
government controls of the entry, rates, and services provided by transportation carriers
Safety (and social) Regulation
regulation designed to ensure that transportation carriers conduct their activities in a safe and responsible manner
Economy of Scale
the cost per unit f weight decreases as the size of the shipment increases
Economy of Distance
the cost per unit of distance decreases as the distance moved increases
Consolidation
combining small orders or shipments into one larger shipment to take advantage of transportation economies
Market Area Consolidation
combining several small shipments from one shipper that are going to the same market area into one shipment
Pooled Delivery Consolidation
combines small shipments from different shippers that aw going to the same market area
Scheduled Delivery Consolidation
establishing specific times when deliveries to customers will be made
Five Modes of Transportation
rail truck water air pipeline
Truckload (TL)
truckload carriers generally carry only full trailers of freight (i.e. with shipments in excess of 15,000 pounds)
Less-than-Truckload (LTL)
move loads less than 15,000 pounds
Speciality Carriers
include package haulers such as FedEx and UPS
Common Carriers
transportation companies that provide services to the public
Contract Carriers
carriers that have specific contracts with a limited number of shippers
Private Carriers
companies that own and operate transportation equipment to transport their own products
Value Density
tha ratio of product’s value to its weight
Distribution Center
term used to describe the strategic role of warehouses in storage and creating assortments that meet customer requirements
Transshipment Point
a facility where products are received, sorted, sequences, and selected into loads consistent with the customers’ needs
Stockpiling
the storage of inventory in warehouses to protect against seasonality wither in supply or demand
Production Support Warehouse
a warehouse dedicated to storing parts and components needed to supports a plant’s operations
Break-Bulk
splitting a large shipment into individual orders and arranging for local delivery to customers
Warehouse Consolidation
combining shipments from a number of sources into one larger shipment going to a single location
Cross-docking
combines break-bulk and consolidation warehouse activities
Value-added Services
any work that creates greater value for customers
Containerization (Unitization)
creating one large container out of several smaller units
Automated Storage and Retrieval Systems (AS/AR)
computer controlled systems that use robots to automatically select, find, retrieve, and convey product items from storage bins to loading docks
Center-of-Gravity Method
attempts to find the lowest-cost location for a facility based on demand and distance
Logistics Postponement
stock products in a single or only a few locations rather than spread inventory out across a large number of warehouses
Integrated Service Providers (ISPs) or Third-Party Logistics Providers (3PLs)
companies that provide a range of logistical services
Warehouse Operations (6)
Receiving and unloading In-storage handling storage order-picking staging shipping
Factors influencing Network Design (10)
labor (availability and cost) proximity of suppliers proximity of customers construction costs land costs taxes regulations incentive packages transportation infrastructure quality of life for employees
Total Network Cost is a function of:
transportation and inventory costs
