MGT 302_Exam 3_StudyGuide.pdf

MGT 302_Exam 3_StudyGuide.pdf - MGT 302—FINAL EXAM(3...

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MGT 302—FINAL EXAM (3) MATERIAL Chapter 14: Location, Logistics and Distribution What is logistics & how does it interface with other areas of business o Logistics: the art and science of obtaining, producing, and distributing material and product in the proper place and in proper quantities o Logistics interfaces with… § Manufacturing § Marketing § Finance/accounting § HR o Objectives: “7 Rs” of Logistics § Right product § Right quantity § Right place § Right time § Right condition § Right customer § Right cost Components of a logistics system o Warehousing, material handling, packaging o Facility Network o Order Management o Inventory o Transportation Performance measures of logistics (ROA—cost minimization, asset optimization, and revenue enhancement) o ROA = gross profit/assets Relationships and tradeoffs of Logistics performance Chapter 11: Inventory Management Reason for carrying inventory o To maintain independence of operations § because there are costs for making each new production setup, this inventory allows management to reduce the number of setups o To meet variation in product demand § safety or buffer stock must be maintained to absorb variation o To allow flexibility in production scheduling o To provide a safeguard for variation in raw material delivery time o To take advantage of economic purchase order size o Many other domain-specific reasons
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Why inventory can be a problem Different models for positioning inventory in the SC o Distribution Center Delivery § Supplier: transport efficiency § Retailers: owns inventory, scale economies, trans consol’n saving o Cross-Docking § Supplier: higher inventory, higher operating costs, high transport costs § Retailer: warehouse space savings, low labor cots, high coordination costs o Direct-to-Store Delivery § Supplier: higher inventory, higher operating costs, high transport costs § Retailer: no warehouse facilities, low inventories, fresher stock, high control costs, higher delivery risks Types of inventory o Batching economies à cycle stocks § Price discounts § Transportation rate discounts § Production economics favor long o Uncertainty & risk à safety stocks § Demand § Order cycle § Other risk factors (strikes, political events, etc) o Time à in-transit & W-I-P stocks o Seasonality à speculative stocks ABC classification of inventory
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