CHAPTER 10
Copyright By PowCoder代写 加微信 powcoder
Learning Objectives
Define the scope and purpose of logistics.
Explain transportation economics.
Compare the strengths and weaknesses of the five modes of transportation.
Discriminate among the different functions of warehouses.
Describe how to determine the number and location of warehouses.
Consider when a firm should use a Third Party Logistics Provider.
Explain why a logistics strategy is needed.
Logistics Definition
Inbound to firm
Outbound from firm
Warehousing (storage)
Network design
Plans, implements, and controls the forward and reverse flows and storage of goods and related information between the point of origin and consumption in order to meet customer requirements.
Importance of Logistics
Strategic decisions
Operational decisions
Integration with other functions
Marketing to fulfill customer demand
Information systems to link functions and firm locations
Finance due to large investments in inventory, warehousing
Boundary spanning activities
Critical Logistics Decisions
Modes of transportation
Types of warehousing
Locations of facilities and warehouses
Insourcing versus outsourcing
Strategic role of logistics in creating and supporting competitive advantage
Transportation Economics
Economies of scale (spreading fixed costs)
Larger shipments cost less per pound (than smaller)
Full truckloads cost less per pound (than partial)
Longer distances cost less per pound (than shorter)
Longer distances cost less per mile (than shorter)
Regular shipping costs less per mile/pound (than expedited)
Transportation Economics example
A company has three shipments of 10,000 pounds each going to the same location from different nearby cities. The carrier charges $10 per hundredweight (cwt) for each of the shipments by truck.
If the shipments are consolidated into one truck, the carrier will take the 30,000 pounds for $7 per cwt, but charges $300 each for the two extra stops.
Should the company consolidate the two shipments?
The cost of shipping separately in three trucks is:
Cost = 10,000 ($10/100 pounds)*(3 shipments) = $1,000 * 3 = $3,000
The cost of consolidating the three shipments is:
Cost = 30,000 ($7/100 pounds) + $300*(2) = $2,100 + $600 = $2,700
It is cheaper to consolidate the shipments.
Transportation Decisions (Table 18.2)
Mode Advantages Disadvantages
Truck Can move freight quickly over long distances. Very flexible on locations. Can be linked with rail or air. More expensive for heavy and bulky freight than other modes.
Rail Relatively inexpensive for long distances. Can be linked with truck or ocean freight. Relatively slow.
Water (inland) Low cost for moving bulk commodities. Effective when linked to multi-modes. Subject to proximity of waterway locations. Relatively slow.
Water (ocean) Cost-effective way to ship freight in containers over long distances. Very slow.
Air Fast way to move freight. Flexible when linked to trucks. Very expensive.
Pipeline Can move bulk commodities such as oil, gas, and chemicals for long distances. Expensive to install.
Distribution Centers and Warehousing
Consolidation
Distribution Centers and Warehousing
Break-bulk
Distribution Centers and Warehousing
Cross-docking
Other purposes of
Distribution Centers and Warehousing
Managing seasonal demand
Supporting manufacturing
Incoming raw materials
Outgoing finished goods
Providing value-added services
Handling reverse logistics
Logistics Networks (Figure 18.2)
Logistics Networks – Location factors
Labor availability
Cost of labor
Cost of construction and maintenance
Cost of transportation
Government incentives
Government regulations
Delivery time to customer
Proximity to suppliers
Highway and rail availability
Logistics Networks – Location
Center of gravity analytics
Center of Gravity Example
XCG = 10(5000) + 20(7500) + 25(6000) = 18.9
5000 + 7500 + 6000
YCG = 10(5000) + 25(7500) + 35(6000) = 24.2
5000 + 7500 + 6000
Customer X coordinate Y Coordinate Demand (lbs)
A 10 10 5000
B 20 25 7500
C 25 35 6000
Logistics Networks – Warehouses (Fig. 18.4)
Third-Party Logistics Providers (3PL)
Transportation services
Warehousing services
Inventory management services
Reverse logistics services
Access to logistics expertise
Enhanced flexibility to changing markets/technology
Lower cost than insourcing
Logistics Strategy
Determine objectives
Cost, delivery, service quality, flexibility
Ownership vs. outsourcing logistics function
Transportation modes
Warehousing network
Number and location of facilities
程序代写 CS代考 加微信: powcoder QQ: 1823890830 Email: powcoder@163.com