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Unformatted text preview: pare parts §༊ Calculation to determine the spare part service cost is as follows: • Service Cost = Penalty Cost + Lost Purchase Margin + Lost Support Margin M༄ Service Recovery §༊ No matter how well an organization plans to provide excellent service, mistakes will occur §༊ Recovery requires a firm to realize that mistakes will occur and have plans in place to fix them Summary M༄ Order management and customer service are not mutually exclusive; there is a direct and critical relationship between these two concept M༄ There are two distinct, yet related aspects of order management: influencing the customer’s order and executing the customer’s order M༄ Customer relationship management (CRM) is a concept being used today by organizations to help them better understand their customers’ requirements and understand how these requirements integrate back into their internal operations processes M༄ Activity- based costing (ABC) is being used today to help organizations develop customer profitability profiles which allow for customer segmentation strategies M༄ Order management, or order execution, is the interface between buyers and sellers in the market and directly influencing customer service M༄ Order management can be measured in various ways. Traditionally, however, buyers will assess the effectives of order management using order cycle time and dependability as the metric, while sellers will use the order- to- cash cycle as their metric M༄ Customer service is considered the interface between logistics and marketing in seller organizations M༄ The three definitions of customer service are: 1) as an activity, 2) as a set of performance metrics, and 3) as a philosophy M༄ The major elements of customer service are time, dependability, communications, and convenience M༄ Stockout costs can be calculate as back order costs, the cost of lost sales, and/or the cost of a lost customer M༄ The five outputs from order management that influence customer service, customer satisfaction, and profitability are: 1) product availability, 2) order cycle time, 3) logistics operations responsiveness, 4) logistics system information, and 5) Postsale logistics support...
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- Spring '14