CHAPTER 4 Flashcards
a key factor in ensuring the success of an organization from ensuring that the organization has all that it requires to produce results to ensuring that customers are satisfied
effecient logistics
is the management of the flow of goods, resources and information between the point of origin and the destination
Logistics
the process of planning and implementing the efficient transportation and storage of goods from one point to another.
Logistics
ensures that all materials and personnel are available on time and in the right place to ensure that a business objective is accomplished
Logistics
implies having the right type of product or service at the right place, at the right time, for a right price and in the right condition
Logistics
It can be looked at as a subset of supply chain management which ties into project management by ensuring timely completion of a project.
Logistics
focuses on planning, optimizing and executing the use of vehicles to move goods from one place to another.
Transportation
- Route planning
Transportation
- Route optimization
Transportation
- Communication
Transportation
- Cost optimization
Transportation
- Organization of quotes
Transportation
- Improving accountability
Transportation
- Freight payment
Transportation
- Operations execution
Transportation
- Transportation order planning
Transportation
- Consolidating requests
Transportation
- Improving delivery capabilities
Transportation
includes functions like inventory planning and management and order fulfillment. It also involve involves the control and administration of warehouse operations where equipment, vehicles and goods are kept.
Warehousing
- Improves flexibility and responsiveness
Warehousing
- Eases activities like orders and shipments
Warehousing
- Secures the expensive equipment
Warehousing
- Labor management
Warehousing
- Ensures that equipment are kept in check
Warehousing
This deals with the loading, offloading and the movement of materials at the point of origin, in transit and at the point of consumption.
Material handling
This is the process of ordering, storing and using the inventory of the organization with regard to the type and amount of material in a storage facility.
Inventory Management
This is the movement of materials from the point of origin to the point of production.
Inbound Logistics
This is the movement of finished goods from the point of production to the point of consumption.
Outbound logistics
This is the movement of damaged goods from customers back to the point of production
Reverse Logistics
This is an expert in logistics
LOGISTICIAN
who coordinated the organization’s supply chain.
LOGISTICIAN
Find the cheapest and fastest way to transport goods
LOGISTICIAN
Make suggestions to customers regarding improvements
LOGISTICIAN
Keep informed on the latest advancements in logistics technology
LOGISTICIAN
Strive to determine what customers’ needs are and ensure that they must meet them
LOGISTICIAN
Assess logistics functions and work to improve them
LOGISTICIAN
A physical resource that a firm holds in stock with the intent of selling it or transforming it into a more valuable state.
INVENTORY
A set of policies and controls that monitors levels of inventory and determines what levels should be maintained, when stock should be replenished, and how large orders should be
INVENTORY SYSTEM
involve items used to make finished products.
. Raw Materials Inventory
Raw materials can be commodities or components that businesses buy or extract themselves. In sum, they’re all the stock that hasn’t been used for manufacturing yet. For accounting purposes, raw materials are considered an inventory asset, debited to raw materials and credited to accounts payable.
. Raw Materials Inventory
formula to calculate the total cost of your raw materials
Total Raw Materials = Beginning inventory + Purchases added – Ending inventory
are all the materials that make up the finished product.
Direct raw materials
are considered a part of the cost of goods produced, which is then divided into the cost of goods sold and ending inventory
Direct raw materials
are materials that are consumed during the manufacturing process, but aren’t a part of the final product.
Indirect Raw Materials
typically fall under manufacturing overhead and are added to the cost of goods sold. If only a small amount of an indirect raw material is used, they are sometimes reported to an expense as incurred.
Indirect Raw Materials
consists of items used to keep a manufacturing company running smoothly
Maintenance, Repair, and Operating (MRO) Inventory
can include things like employee uniforms, industrial equipment, cleaning supplies, and safety equipment, as well as any materials you use to repair or maintain manufacturing equipment.
Maintenance, Repair, and Operating (MRO) Inventory
key to keeping operations running and make up a large percentage of total purchase for factories. But, as a category, it’s often overlooked when it comes to inventory control.
Maintenance, Repair, and Operating (MRO) Inventory
All the materials used to create a finished product
Work In Progress (WIP) Inventory
does not include raw materials sitting on the shelf or the finished goods that are ready for sale; they’re somewhere in between
Work In Progress (WIP) Inventory
are items that are ready for show time.
Finished Goods Inventory
They’ve been manufactured from raw materials or purchased from a supplier, and are ready to be sold to customers
Finished Goods Inventory
The finished goods inventory formula
Finished Goods = (Cost of Goods Manufactured – Cost of Goods Sold) + Previous Finished Goods Inventory Value
combined with raw materials and WIP inventory to make up the total inventory line item on a balance sheet
Finished Goods Inventory
includes any items your business used to pack the products you sell
Packing Materials Inventory
cost of holding an item in inventory
CARRYING COSTS
cost of replenishing inventory
ORDERING COSTS
temporary or permanent loss of sales when demand cannot be met
SHORTAGE COST
Average amount of inventory used to satisfy demand between shipments
Cycle inventory
Depends on lot size
Cycle inventory
inventory held in case demand exceeds expectations
Safety inventory
costs of carrying too much inventory versus cost of losing sales
Safety inventory
inventory built up to counter predictable variability in demand
Seasonal inventory
cost of carrying additional inventory versus cost of flexible production
Seasonal inventory
Delivering right quality product to the customer
QUALITY
Ensuring products are delivered in time
SPEED
Ability to take into account any variation in demand up and down the supply chain
FLEXIBILITY
Keeping the Inventory handling cost as low as possible
COST
transportation
components of logistics
ordering processing
components of logistics
packaging
components of logistics
supply
components of logistics
inventory planning and management
components of logistics
warehousing
components of logistics
need for finished goods inventories
MACRO ISSUES
ownership of inventories
macro issues
specific contents of inventories
macro issues
locations of inventories
macro issues
tracking
macro issues
order quantity
micro issues
order timing
micro issues
- Need to satisfy internal or external customers
Need for Finished Goods Inventories
- Can someone else in the value chain carry the inventory
Need for Finished Goods Inventories
- proper accountability to minimize losses
Ownership of Inventories
- knowing your inventory -visibility
Specific Contents of Inventories
- Placing inventory at the right place for quick order
Locations of Inventories
- Locating where your inventory is to eliminate uncertainty and timely delivery
Tracking
- Economic Order Quantity
Order Quantity
- Reorder Point
Order Timing
