Fundamentals

Question 1

What are the main categories of functional activities?

Answer 1

• transport (transfer of objects in space)
• transshipment/handling (modifcation of the order of objects)
• storage (transfer of objects in time)
• packing

⇒ A logistics system consists of facilities, in which one or more functional activities are carried out

Question 2

What stands the shortcut CDC and RDC for

Answer 2

central distribution system

regional distribution center

Question 3

Logistic activities involve costs
⇒ value of the product increases

How is value added?

Answer 3

spatial (distribution)

temporal (storage)

Question 4

What is a formal way of representing logistics systems?

Answer 4

Directed multigraphs
G = (V, A):
V: set of facilities, e.g., production sites, customers, depots,
airports, train stations, . . .
A: set of connections between the facilities, e.g., ow of
materials, transportation requests, fow of information

Question 5

Name the characteristics of a multigraph

Answer 5

• several arcs between a pair of facilities possible

- representation of alternative forms of transport services, different routes, or different products

Question 6

Characteristics of Supply logistics:

Answer 6

• before production
• management of raw materials, materials and component parts
  supply

Question 7

Characteristics of Internal logistics:

Answer 7

• in production plants
• receiving and storing materials, transport from warehouse to
  production lines, packaging and storing the semi-finished and
  finished products

Question 8

Characteristics of Distribution logistics:

Answer 8

• after production, before market

- supply of sales points or customers

Question 9

Characteristics of External logistics:

Answer 9

supply logistics and distribution logistics

Question 10

Characteristics of Primary logistics activities:

Answer 10

storage and distribution of finished

products

Question 11

Characteristics of typical flow of materials in logistics networks

Answer 11

• suppliers → processing and assembly plants
  → sales points → customers
• Exceptions: recycling of product wrapping, return of defective
  components or products
• Integrated with information fow in the opposite direction:
  Make to Order logistics systems: customers’ orders →
  production plan → demand for materials and components
  Make to Stock logistics systems: market information (demand
  recorded in the past, results of possible market surveys etc.)
  → mode of distribution → production plan → supply plan

Question 12

Handling of growing complexity in logistics systems

Answer 12

Grouping of products into classes of different importance

• Approach:
• -> ABC-Analysis
• -> 80-20 Pareto principle

Question 13

Which measures can be used to characterize objectives of logistics?

Answer 13

Costs, profits, and service level

Question 14

profits and service Level

Answer 14

• Logistics activities affect company profits

- Service level: overall degree of customer satisfaction

Question 15

Measures of service Level 1

Answer 15

Order-cycle time: time interval from the issuing of an order to the delivery of the product

Components:

• order processing time
• availability check
• assembly time
• shipping time

Question 16

What are the different parts of Management of Logistics Planning

Answer 16

Process of planning, organizing and controlling the logistics
system

• planning: taking the best decisions possible
  -organizing the human resources directly involved in logistics
  activities
• control: measuring the performance

Question 17

What steps does Planning involve and which difficulties are there?

Answer 17

Planning is the goal-oriented mental anticipation of future actions,
and involves:

• recognizing and analyzing the decision problem
• defining objectives
• forecasting future developments
• identifying and evaluating feasible alternatives (solutions)
• selecting one (good) solution

Main difficulties:

• conflicting goals
• enormous amount of possible alternatives and interdependencies
• uncertainty

Question 18

What are the decision making areas of planning

Answer 18

• forecasting,
• supply,
• distribution,
• storage,
• and location

Question 19

Characteristics of strategic decisions

Answer 19

• long-term effect (more than a year)
• involve major financial investments
• unlikely to be reversible in the short term
• based on forecasts relative to aggregated data
• responsibility of top management

Question 20

Characteristics of tactical decisions

Answer 20

• medium-term effect (year, season or month)
• refer to the use of available resources
• usually based on forecasts
• derived from results of strategic planning
• often rough demand and capacity planning considering
  seasonal effects

Question 21

Characteristics of operational decisions

Answer 21

-short-term effect (week or day)
- detailed plans for the execution of activities respecting the
frame conditions
- concrete, non-aggregated planning objects
- data from the surrounding environment and results of forecasts

Question 22

Name the four types of analystics

Answer 22

• Descriptive (What happened)
• Diagnostic (Why did it happen)
• Predictive (What will happen)
• Prescriptive (What should I do)

Question 23

Principle of parsimony:

Answer 23

as detailed as necessary and as simple
as possible

• simplification too strong: not feasible and/or not optimal in
  reality
• too detailed (more dangerous in practice): eort to model and
  solve, availability of data
• validation: suitability and correctness of steps of optimization
  process

Question 24

Black box / white box validation

Answer 24

• black box validation: systematic investigation of behavior
  using small/well-researched instances
• white box validation: inner workings of the code