Council of Supply Chain Management Professionals (CSCMP) defines logistics as the part of supply chain management that plans, implements, and controls the efficient, effective forward and reverse flow and storage of goods, services and related information between the point of origin and the point of consumption in order to meet customers’ requirements.
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Which part of supply chain management does plan, implement, and control the efficient, effective forward and reverse flow and storage of goods, services and related information between the point of origin and the point of consumption?
What is logistics?
Chartered Institute of Logistics and Transport in the United Kingdom (CILT-UK) defines logistics as five rights. According to CILT-UK, logistics is the process of ensuring that goods or a service is:
- In the right place
- At the right time
- In the right quantity
- At the right quality
- At the right price
What is the difference between efficiency and effectiveness?
Logistics should be both efficient and effective. Efficiency is doing the job right and effectiveness is doing the right job (Drucker, 1963). A logistics operation converts company inputs into outputs. An efficient operation uses minimum amount of inputs to produce the required amount of outputs, whereas an effective operation generates outputs that are relevant with customer requirements.
What is the reverse logistics?
From a traditional point of view, logistics deals with the flow and storage of goods from suppliers to customers. Returned goods originate at the point of consumption and have to flow in the reverse direction through the suppliers, this is called Reverse Logistics.
What is the place utility and time utility?
Place utility is generated by moving products where customers need them. Time utility is generated by having products when customers need them. For example, a street seller offering umbrellas on a rainy day generates both place and time utility.
What is the humanitarian logistics?
Although logistics is generally considered in a for-profit setting, humanitarian logistics is a branch of logistics that operates in a not-for-profit environment and aims to help people who have been affected, or likely to be affected by a (natural or man-made) disaster. Humanitarian logistics is defined as the process of planning, implementing and controlling the efficient, cost-effective flow and storage of goods and materials, as well as related information, from the point of origin to the point of consumption for the purpose of alleviating the suffering of vulnerable people.
Which actors do take place in the logistic network?
Logistics affects multiple organizations and it is possible to consider a network composed of these organizations. The customers of the company are the warehouses and called as first tier customers. Retailers are the customers of the warehouses and they are the second tier customers of the company. Similarly, the company has first and second tier suppliers. The customers of retailers are the consumers of the goods.
Which activity has the highest cost share in total logistics costs?
Total logistics cost can be analyzed under four activities; transportation, inventory, warehousing and administration. Transportation cost has the highest share and may account up to two-thirds of the total logistics costs.
What are the fixed and variable costs in operational management costs?
Administrative costs related with order management are fixed costs. Costs of loading and unloading goods, movement costs, inventory control and inventory management costs and packaging costs are variable costs.
What is the customer service level?
Customer service level is the performance of the logistics system in meeting customers’ requirements. However, there are multiple methods to define and measure customer service level. More importantly, the customer and the company may have different understandings of customer service, and the same service may be considered at different service levels, leading to conflicts and problems between the company and the customer. Companies aim to maximize their customer service levels.
The Product X is produced at Point A with a cost of 100 and market price is 500. The current transportation system has a fixed cost of 50 and a variable cost of 1 per km. Given these costs, what is the market radius for producer?
Market radius= (Price - Product Cost - Transportation System Fixed Costs)/ Transportation System Variable Cost
Market radius= (500-100-50)/1=350
What is Lardner's Law?
The increase in the market size is faster than the reduction in the transportation cost; this phenomenon is known as the Lardner’s Law.
How does the amount of transportation measure for freight transportation?
The amount of transportation is measured in weight-distance (i.e. ton-kilometer) for freight transportation and passenger-distance for passenger transportation.
What is multimodal transportation?
There are five modes of freight transportation; road, rail, air, water and pipeline transport. Each transportation mode has distinct properties and is preferred in certain situations. These modes serve for several types of transportation demand with their varying characteristics, costs and area of span. In some cases, door- to-door service with a single transportation mode may not be preferred or it may not be even possible. In such cases a combination of multiple modes is utilized which is called multimodal transportation.
Who are the main actors of freight transportation?
In freight transportation, there are different players. Manufacturing companies are shippers that generate transportation demand. In some cases, the shippers utilize their private fleet and carry out the transportation activity with their own resources. Carriers provide transportation services to shippers. Governments and international organizations are responsible to provide the necessary business environment including the construction, management and maintenance of the transportation infrastructure (such as roads, bridges, ports) and establishment of transportation policies.
Which transportation mode is cheaper than the others?
Cost is computed based on the type of the carrier. If shipper realizes the transportation, the cost components include the depreciation and maintenance of the vehicles, employee salaries, loading and unloading costs, fuel consumption costs and all related insurances. Based on the specific requirements of the transportation and the selected mode, additional costs can be incurred. Water is the cheapest mode of transportation, followed by pipeline, rail, road and air.
Which transportation mode is more reliable relative the others?
Ghiani, Laporte and Musmanno, report the modes with respect to their reliability; pipeline being the most reliable, followed by air, rail, road and water.
What are the additional criteria for mode selection process in logistics?
Mode selection decision is made by considering two main criteria: cost and transit time. Gleissner and Femerling (2013, p. 56) discuss a number of additional criteria for mode selection:
- Mass transport capacity: capability to transport large amounts of goods at low costs.
- Flexible schedules: capability to adapt to changes in schedules and requirements.
- Spatial flexibility: capability of changing locations of transport vehicles and integrating transport capacities
- Safety: providing a safe transport for involved people and the shipped goods; collecting and monitoring safety related data such as accidents and amount of damage.
- Environmental impact: monitoring pollutant and noise emissions and use of cleaner energy sources.
Which mode of transportation has the highest cost?
Air transportation offers the shortest transit time especially for long distances. However due to its high cost, it is generally used for highly valued products, perishable items and emergency cases.
Which mode of transportation has the highest flexibility?
Road transportation is also referred to as truck, highway or motor carriage. Road transportation plays an important role in economy and provides door-to-door services between origin and destination. Road transportation has the highest flexibility relative to other modes of transportation.