CUSTOMER ORIENTED LOGISTICS MANAGEMENT

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Objectives of Logistics

Cost Reduction Strategy Capital Reduction Strategy Service Improvement

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Logistics Planning
Inventory Management Inventory Management Inventory Levels Deployment of Inventories Control Methods Inventory Management Transportation Decisions Modes of Transport Carrier Routing /Scheduling Shipment Size

Customer Service Goals

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Location Decsion Number, Size and Location of facilities Assignements of Stocking points Assignmennt of Demand to Stocking Points

Facilities Decision

Three types of outbound logistics strategies Direct Shipment Warehousing Cross-Docking

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Concerns in Cross Docking

Inventory Destination is known when stocks are received Customer is ready to receive inventory immediately The number of locations to ship inventories are not high It is possible to prelabel the inventories
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Inventory arrives in a state

Why are Warehouses Needed?

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Main Functions of Warehousing Operations

Storage Bulk Breaking Consolidation Information

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Main Activities of Warehousing Operations

Movement Storage Information transfer

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Main Decisions of Warehousing

Location Number of Warehouses

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Number of Warehouses

Cost of Lost Sales Inventory Costs Transportation Costs Warehousing Cost

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Warehousing Location

Macro Perspectives Micro Perspectives

Centre of Gravity Method Cost Volume Profit Analysis

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Costs Associated With Inventory

Inventory Procurement Costs Inventory Carrying Costs Stockout Costs

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Inventory Carrying Costs

Capital Costs Inventory Service Costs Storage Space Costs Inventory Risk Costs

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Out of Stock Costs

Cost of Lost Sales Back Order Costs

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Inventory Level Decisions

Push vs Pull Inventory Control

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Order Quantity Decisions

TC = (D/Q) S + IC (Q/2) TC = Total Cost D = Annual Demand For the Item in Inv. Units S = Ordering Cost I3/14/12 = Inventory Carrying Cost Per Unit

RISK POOLING

Risk Pooling Echelon Inventory

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Distribution Resources Planning (DRP) System

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Transportation Decision

Mode Selection Vehicle Routing and Scheduling Freight Consolidation

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Factors affecting Transportation Costs

What are the different components of the logistics cost and how do each of them vary with the number of warehouses

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Quiz

What are the different components of the logistics cost and how do each of them vary with the number of warehouses

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The Channel Core Elements

Address the primary concerns of the channel members

Financial Returns for the Channel Member Quality of the Product The market price Delivery Reliability of the brand

Reputation 3/14/12

Capability Building Program

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Incentive Program

Tactical

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Indirect Influence Strategies Direct Ummediated Strategies Reward and Punishment

Channel Influence Strategies

Information Exchange Information Control Modelling Recommendation Warning Positive Normative Negative Normative Economic Reward Noneconomic Reward Economic Punishment Non-economic punishment Direct Request Personal Plea Promise

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Direct Unweighted Strategy Direct Mediated Strategy

Channel Conflict

Channel Conflict

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Exercising Influence Strategies

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