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logistics
activities that focus on getting the right amt of the right products to the right place at the right time at the lowest possible cost
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logistics mgmt
practice of organizing the cost-effective flow of raw materials, in-process inventory, F/G, & related info from the pt. of origin to pt. of consumption to satisfy customer requirements
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supply chain
sequence of firms that perform activities required to create and deliver a product or service to ultimate consumers or industrial users
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customer service
ability of logistics mgmt to satisfy users in terms of time, dependability, communication, & convenience
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extranet
Internet-based network that permits secure business-to-business communication between a manufacturer and its suppliers, distributors, & sometimes other partners
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total logistics cost
expenses associated with transportation, material handling & warehousing, inventory, stockouts (being out of inventory), order processing, & return goods handling
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electronic data intercharge (EDI)
combining proprietary coputer & telecommunication technologies to exchange electronic invoices, payments, & info among suppliers, manufacturers, & retailers
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supply chain mgmt
integration & organization of info & logistic activities across firms in a supply chain for purpose of creating & delivering products & services that provide value to ultimate consumers
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lead time;
order cycle time; replenishment time
time lag from ordering an item until it is received & ready for use or sale
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quick response;
efficient consumer response
inventory magmt systems that are designed to reduce a retailer's lead time for receiving merchandise, which then lowers a retailer's inventory investment, improves customer service levels, and reduces logistics expense
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communication
- process of conveying a msg to others that requres 6 elements:
- a source, message, channel of communication, receiver, & processes of encoding & decoding;
- 2-way link between buyer & seller that helps monitoring service & anticipating future needs
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3rd-party logistics providers
firms that perform most or all of the logistics functions that manufactureers, suppliers, and distributors would normally perform themselves
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transportation (6 basic service criteria)
Frequency, Accessibility, Capability, Time, Dependability, Cost
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cost
charges for transportation
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capability
what can be realistically carried with this mode
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dependability (consistency of replenishment)
3 elements
consistent lead time, safe delivery, & complete delivery
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dependability
reliability of service regarding time, loss, and damage;
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accessibility
convenience of the mode's routes (such as pipeline availability)
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intermodal transportation
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trailer on flatcar (TOFC);
piggyback
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less-than-truckload (LTL)
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reasons for inventory (6)
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inventory costs
Risk costs, Storage costs, Inventory service costs, Capital costs
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capital costs
(these are related to interest rates)
opportunity costs resulting from tying up funds in inventory instead of using them in other, more profitable investments
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inventory service costs
items such as insurance and taxes that are present in many states
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storage costs
warehousing space and materials handling
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risk costs
possible loss, damage, pilferage, perishability, and obsolescence
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just-in-time (JIT) concept
inventory supply system that operates with very low inventories and requires fast, on-time delivery
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vendor-managed inventory (VMI)
inventory-mgmt systeme whereby the supplier determines the product amt & assortment a customer (such as a retailer) needs & automatically delivers the appropriate items
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reverse logistics
process of reclaiming recyclable and reusable materials, returns, and reworks from the point of consumption or use for repair, remanufacturing, redistribution, or disposal
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