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Logistics Exam 1 Questions + Answers (Kissick)
Terms in this set (37)
What are the primary forces driving the rate of change in economic and political landscape?
Organizational Consolidation + Power Shift
Empowerment of the Consumer
Gov. Policy and Regulations
Logistics can be divided into two major categories. What are they? Explain each one briefly.
1)- INBOUND LOGISTICS- Planning, forecasting, Purchasing, production. Raw Materials/inbound materials.
2)- OUTBOUND LOGISTICS- Geared towards customer satisfaction. Physical Distribution. Delivery Ops. Warehousing, transportation, materials.
What are the five primary activities in the value chain?
1) Inbound Logistics
3) Outbound Logistics
Briefly explain why a reduction in the throughput time is beneficial to the organization:
- By reducing Throughput time, costs may decrease allowing more competitive pricing. Inventory is more controllable and easier to prevent stockovers.
-Improved Quality, lower work in process and finished goods inventory (significant is ultimately a reduction in costs for the company)
-Less forecasting error - shorter time horizons
-Greater flexibility - in regards to production and manufacturing changes. For example, if a company detects a decrease in demand for their product, they can more effortlessly make short notice changes. (Bullwhip effect)
What is the Bullwhip Effect?
-Long intervals between orders.
-Can cause uncertainty about levels and patterns of demand.
-Can cause high inventory which is costly to maintain.
What are the 7 r's of logistics?
1- right product
2- right place
3- right customer
4- right price
5- right condition
6- right time
7- right quantity
What are the 5 forms of utility that add value to a product? Explain each BRIEFLY
-value added by changing form of the product (taking raw materials and making an iPhone).
- Value added by having it available at a specific demand point and time. (Important because companies need to reduce costs. Timing is becoming more and more crucial. See "JIT Inventory")
- moving from production points to market points. (transportation)
-causes competition to INCREASE, which causes demand to DECREASE, and availability to INCREASE.
- Deliverance of the proper quantities. (too less of something could hinder sales, too much could cost more in inventory.)
- Created through basic marketing activities related to promotion and sale. (direct and indirect contact with the customer)
There are many logistics activities, list 6 of these.
warehousing / storage
Production Planning / Scheduling
Name the four principal areas of marketing that logistics interacts with.
What are three factors relating to the cost and importance of logistics?
What are the four competitive related factors that affect the cost and importance of logistics?
What are the product related factors that affect the cost and importance of logistics?
Special Handling and Susceptibility to Damage
How do the following affect the inventory, transportation, and packaging costs?
In logistics, what are nodes and links?
Nodes - fixed spatial points where goods stop for storage and processing
Links- represent the transportation network which connects the nodes in the logistics system
We are comparing two systems. System 1 has a high fixed cost and low variable costs. System 2 has low fixed costs and high variable costs. If the quantity of a product is small, which system would be preferred? if the quantity of a product is large, which system would be preferred? explain each answer briefly.
System 1 is better with high output levels since the variable costs are lower.
System 2 would be more ideal for smaller quantities.
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