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There are four logistics concepts: the systems concept – the total cost concept – the after-tax concept – the trade-off concept The systems concept is based on all functions of a organization working together in order to maximize bundestagger.deted Reading Time: 12 mins. The above graph portrays a simple relationship between total logistics costs and two important cost components; transport and warehousing. Based upon the growth in the shipment size (economies of scale) or the number of warehouses (lower distances), a balancing act takes place between transport costs and warehousing (inventory carrying) costs. 10/03/ · Logistics is the way your company organizes its transportation, warehousing, inventory, customer service and information processing systems. There are always tradeoffs in business. Do you keep larger inventories of your products, resulting in increased warehousing costs, more waste in outmoded or outdated product on the shelf, and higher management costs? showed that most logistics p rofessionals know that there are trade-offs but lack a broad understan ding of the concept, especially with res- pect to the relation ship between trade-offs and total Estimated Reading Time: 6 mins.
Logistics is the procedure of ensuring the right type of products and services at the right time, place, and time. Its purpose is to satisfy the customers by setting up coordination of people at different levels of the organization in the marketplace. Become a Study. Create your account. A trade-off can also be specified as an opportunity cost. The trade-off is the exchanging of one advantage to attain the necessities which correspond Try it risk-free for 30 days.
Logistics management is essential for the proper functioning of a supply chain and for successfully serving customers. In this lesson, you’ll learn about the role of logistics in supply chain management and how intermediaries can be used in the process. Log in. Sign Up. Find Courses by Subject Science Math Business Psychology History English Social Science Humanities Spanish Professional Development.
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At the same time, a great role in the supply chains is played by logistics – the management of physical, informational, and human flows in order to optimize them and avoid unnecessary waste of resources. Below we will talk about the important role of logistics in supply chain management that includes many suppliers, transit points, as well as points of departure and destination.
Logistics and supply chain should not be confused. Logistics is a rather narrowly focused concept narrower than the SCM , which simply means globalization of resource management — from every local unit to the entire network of production points. In turn, supply chain management is a more complex category. Supply chain management involves logistics and thus performs end-to-end optimization – that is, not only within the enterprise but also when working with counterparties.
The purpose of efficient logistics management is to achieve maximum competitiveness and profitability of the company, as well as the entire network structure of supply chains, including the end-user. In this regard, the integration and introduction of innovations into the processes of supply chains, as well as into the processes of logistics, should be aimed at increasing the overall productivity of all their participants.
If we systematize all areas of logistics that need to be developed for the rational management of production resources, we can single out the following functions:. Given the above list of tasks that logistics performs in supply chain management, we can single out a number of advantages provided by its correct implementation:. Thus, the role of logistics in supply chain management is to carry the following values:.
Let’s sum up the role of logistics in supply chain management. The choice of the right software also plays a significant role in optimizing logistic tasks. After all, automation today is at the head of the progress for industrial enterprises.
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Questions Courses. What is it that makes the cost-to-service trade-off the most difficult logistics trade-off to What is it that makes the cost-to-service trade-off the most difficult logistics trade-off to conceptualize? Jan 25 PM. Expert’s Answer Solution. Feedback :. Next Previous. Related Questions. For our purposes, supply chain management: a plans, implements and controls the efficient, effective flow and storage of goods, services, and Explain what is meant by the total cost approach to logistics.
Define what is meant by a cost trade-off. Do you believe that this concept is workable?
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Logistics Management MCQ Questions and Answers Part — 1. Logistics Management MCQ Questions and Answers Part — 2. Logistics Management MCQ Questions and Answers Part — 3. ANSWER: B 2. ANSWER: A 3. ANSWER: C 4. The goal of logistics is A. All of the above. ANSWER: D 5. In the product life cycle, the emphasis in marketing mix during introduction stage is A. Cost reduction. ANSWER: B 6.
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In a competitive market, firms require more accurate and detailed logistics cost information from their cost accounting systems to work out the cost-benefits analysis of their logistics strategies in order to design a cost-effective supply chain. Logistics managers require detailed information to determine how different products, customers or supply channels affect the costs of providing logistics services. The detail and complexity of the cost information will depend on the diversity of products handled, customer requirements or supply channels used.
The cost components that are considered for computation of logistics cost are listed in Table Logistics cost will become more important in product pricing decisions, as firms seek to reduce costs and attain a competitive advantage. Today, with competitive pressure, firms require a more sophisticated cost allocation system to reflect accurately how costs are incurred and to perform profitability analyses of customers.
However, logistics cost data generally do not exist in readily accessible or useable form. Hence, to increase the visibility of logistics costs, firms should adopt the following approach:. The accounting and control of logistics costs must also make some additional adaptations to support integrated logistics management within the firm and across the supply chain.
Porter argued that:.
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As Kanthal expanded operations and increased their market share, they captured business by meeting their customers‘ expectations for increased service. Increased demands were placed on their production and order-handling processes due to the JIT approach adopted by two of Kanthal’s top customers in terms of total sales volume. It was also determined that one of these customers was Premium Revenue , Cost , Fixed cost Words 7 Pages.
The lecture does not follow the format of the book but the book is easy to read and forms a background to the course. Preferred definition: what is logistics? Key words underlined. Logistics is a process — continually doing it, not just once. You plan, implement and control. It includes a planning function, something that you have to plan and based on this plan you
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A dry port is a rail or a barge terminal linked to a maritime terminal with regular inland transport services. They are also called inland ports. Transport development is gradually shifting inland after a phase focused on developing port terminals and maritime shipping networks. The complexity of modern freight distribution, the increased focus on intermodal and co-modal transport solutions, and capacity issues appear to be the main drivers behind a renewed focus on hinterland logistics.
While trucking tends to be sufficient in the initial phase of the development of inland freight distribution systems, at some level of activity, diminishing returns such as congestion, energy consumption, and empty movements become strong incentives to consider the setting of inland terminals as the next step in regional freight planning.
The massification of flows in networks, through a concentration of cargo on a limited set of ports of call and associated corridors to the hinterland, has created the right conditions for nodes to appear along and at the end of these trunk lines. Therefore, bimodal and trimodal inland terminals have become an intrinsic part of the transport system, particularly in gateway regions having a high reliance on trade. The evolution of inland freight distribution can be seen as a cycle in the ongoing developments of containerization and intermodal transportation.
The geographical characteristics linked with modal availability, capacity, and reliability of regional inland access have an important role to play in shaping this development. As maritime shipping networks and port terminals become better integrated, the focus shifted on inland transportation and the inland terminal as a fundamental component of this strategy. Thus, after a phase that relied on the development of port terminals and maritime shipping networks, the integration of maritime and inland freight distribution systems has favored the setting of inland ports.
An inland port has a level of integration with the maritime terminal and supports more efficient access to the inland market for inbound and outbound traffic. This implies an array of related logistical activities linked with the terminal, such as distribution centers, depots for containers and chassis, warehouses, and logistical service providers.
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26/09/ · (1) The existence of trade-offs – The knowledge that logistics costs have heterogeneous behaviors and that an increase in the cost of one logistics activity can be compensated by an increase in revenue (due to the improved level of service) or a reduction in the costs of other logistics activities, and vice-versa; and. Enormously complex trade-offs in performance, logistics support, affordability (including life-cycle-costs), and schedules of AAN development are well beyond the capabilities of current analysis tools. In other words, existing M&S tools cannot support rational and timely trade-off decisions for AAN planners and materiel developers.
To browse Academia. Log In with Facebook Log In with Google Sign Up with Apple. Remember me on this computer. Enter the email address you signed up with and we’ll email you a reset link. Need an account? Click here to sign up. Download Free PDF. The Total Cost Concept of Logistics: One of Many Fundamental Logistics Concepts Begging for Answers. Stanley E Fawcett. Download PDF Download Full PDF Package This paper. A short summary of this paper.
Waller1 and Stanley E. Fawcett2 1 University of Arkansas 2 Air Force Institute of Technology In logistics research, the low hanging fruit has not been and outcomes.