management of the movement and storage of materials at lowest cost while still meeting customers' requirements.
cost to service trade off
as service levels increase, typically so do costs
cost to cost trade off
increasing the cost of one logistics activity reduces the cost of another.
total landed cost
the sum of all product and logistics related costs. includes costs of manufacturing, transit to country of sale and country of sale. bn
combining small orderes or shipments into one larger shipment to take advantage of transportation economies.
market area consolidation
a type of consolidation, combining several small shipments from one shipper that are going to the same market area into one shipment.
a type of consolidation, combine small shipments from different shippers going to the same area.
a type of consolidation, delivery at specific times
ratio of value to weight, often determines the type of carrier used.
provide service to the public with published rates
provide service only to select, contract customers
firm owns its own equipment.
splitting a large shipment into individual orders and arranging for local delivery to customers.
combining shipments from a number of sources into one larger shipment going to a single location.
combines break bulk and consolidation warehouse activities.
center of gravity method
attempts to find the lowest cost location for a facility based on demand and distance.
stock products in a single or only a few locations rather than spread inventory out across a large number of warehouses.
integrated service providers (ISP)
companies that provide a range of logistics services.
third party logistics service providers (3PLs)
a common term used in the industry to describe ISPs.