Efficiently transports natural gas and oil o

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- Efficiently transports natural gas and oil o Advantages: Low maintenance & Dependable o Disadvantages: Few locations, Accommodate only a small number of products & Relatively slow Air freight o Declining in certain market sectors o Firms are adapting Freight Forwarders & Supplemental Carriers o Act as transportation intermediaries that consolidate shipments to gain lower rates for their customers o Logistics manager can ship products via a number of auxiliary, or supplemental, carriers that specialize in small shipments o Common carriers - Provide transportation services as for-hire carriers to the general public; Ex: UPS, FedEx, USPS o Contract carriers - For-hire transporters that do not offer their services to the general public o Private carriers - Provide transportation services solely for internally generated freight Intermodal Coordination o Intermodal operations - Combination of transport modes, to improve customer service and achieve cost advantages o Piggyback - Most widely used form of intermodal coordination; railroad to motor carriers o Birdy back service - Sends motor carriers to pick up a shipment locally and deliver that shipment to local destinations; motor to air carriers o Fishyback service - Intermodal coordination system between motor carriers and water carriers Unitizing - Combining as many packages as possible into each load that moves within or outside a facility Containerization - Combining several unitized loads into a single, well protected load for shipment 5. Identify the major components of a physical distribution system. Physical distribution - Broad range of activities aimed at efficient movement of finished goods from the end of the production line to the consumer o Customer service o Transportation
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Transportation & delivery expenses add approximately 10% to product costs Key to cost control is often careful management of relationships with shipping firms o Inventory control Companies must balance maintaining enough inventory to meet customer demand with incurring unneeded costs for carrying excess inventory To manage cost, firms use: Just-in-time (JIT) RFID technology Vendor-managed inventory (VMI) o Protective packaging and materials handling o Order processing Directly affects firm’s ability to meet customer service standards Includes four major activities: o Conducting a credit check o Keeping a record of the sale o Making appropriate accounting entries o Locating orders, shipping them, and adjusting inventory records o Warehousing Storage warehouse - Holds goods for moderate to long periods in an attempt to balance supply and demand for producers and purchasers Distribution warehouse - Assembles and redistributes goods, keeping them moving as much as possible Reverse Channels Channels designed to return goods to their producers Growing importance because of: o Rising prices for raw materials o Increasing availability of recycling facilities o Passage of additional antipollution conservation laws
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