module 2 Logistics Functions & Supply Chains

Question 1

5 reasons to businesses hold stock

Answer 1

1. it enables a firm to achieve economies of scale
2. balances supply and demand
3. specialisation in manufacturing
4. provides protection from uncertainties in demand
5. acts as a buffer between critical interfaces within the channel of distribution

Question 2

the objective of inventory management

Answer 2

increase corporate profitability by increasing sales or decreasing costs.

decreasing costs: reducing back orders, purging obsolete stock improve accuracy of forecasts

increasing profit: occurred if an increase in inventory leads to better in stock availability and consistent service levles

Question 3

what is logistics

Answer 3

support functions that allow for infrastructure that can control and manage the flow of goods and information through the chain

Question 4

what are the 5 types of transport and their charactoristics

Answer 4

road: direct but small volumes

rail

sea: large quantities

Air: Fast and long distance capable small volumes

pipeline: direct/.large volume not flexible

wireless

Question 5

activities of in warehousing logistics

Answer 5

storing finished goods until they are sold.

Decide on: location, number of warehouses, size, layout, design and ownership

Question 6

activities covered by inventory management in logistics

Answer 6

the purpose of the activities is to enable the supplier to meet the demand of the consumer, in total, at the point of time that it is requested. designed to capture this information and develop policies to meet the patterns of demand

Question 7

activities covered by information management in logistics

Answer 7

Aids and facilitates decision making, complementary or contributory to product flow. Triggers separate activities, helps plan the process, control performance, coordinate and link internal factors and those factors to external contractors/consumers.

Question 8

activities covered by procurement management in logistics

Answer 8

defining and specific source options and which ultimate suppliers are selected. then define and confirm the contract of under which the purchasing will occur

Question 9

activities covered by distribution management in logistics

Answer 9

delivery of goods, services and information across parties located at different locations

Question 10

what is the speculation strategy

Answer 10

a business obtains and holds inventory in anticipation of future demand rather than meet current demand

savings created through economies of sale

suits fast moving consumer goods

large production batches

Question 11

what is the postponement strategy

Answer 11

delaying the production or supply of the item as long as possible to more directly meet consumer demands

requires an integrated and agile supply chain

Question 12

5 functions of logistics

Answer 12

distribution management

information management

inventory management

warehouse management

procurement vmanagement

Question 13

5 types of inventory

Answer 13

cycle stock: This is the stock the replenishment process and is required to meet demand under conditions of certainty

in transit inventories: items on the route from one destination to the other.

safety or buffer stock: stock that is held in excess of cycle stock due to the uncertainty of demand

speculative stock: inventory held for reasons other than satisfying current demand. such as obtain a discount on stock for a larger purchase and or produced for seasonal consumption

dead stock: stock that no longer has a demand through the whole business or in a certain location. if the latter then this stock can be transferred