Logistics Exam 3

  1. What are the top trading partners of US?
    Canada, China, and Mexico
  2. Four important characteristics of glabal markets and strategy:
    • - Standardization reduces complexity
    • - Global competition reduces the product life cycle
    • - Traditional organizational structures and business models frequently change
    • - Globalization introduces more volatility
  3. Major international transportation modes
    Ocean and Air
  4. Land modes of transportation
    Motor and Rail
  5. 3 major categories of ocean shipping
    liner service, charter vessels, private carriers
  6. Liner service
    • Ocean shipping that offers scheduled service on regular routes.
    • Set tariffs and accept certain standards of liability.
    • Carry break-bulk shipments of less-than-shipload size.
    • Mostly containers and roll-on, roll-off ships.
  7. Charter Vessels
    Ocean shipping that firms usually hire on a contract basis and which travel no set routes.
  8. Private carriers
    Can be part of a firm's own supply chain.
  9. Shipping Conferences
    Voluntary associations of ocean carriers that operate over common trade routes and use a common tariff for setting rates on the commodities they handle.
  10. Voyage Charters
    Contracts covering one voyage. The carrier agrees to carry a certain cargo from an origin port to a destination. The price the carrier quotes includes all of the expenses of the sea voyage.
  11. Time charters
    Allow the use of a ship for an agreed-upon time period. The carrier usually supplies a crew as part of the contract. The charterer has exclusive use of the vessel to carry any cargo that the contract does not prohibit and assumes all expenses for the ship's operation during the charter period.
  12. Bareboat/Demise charter
    transfers full control of the vessel of the charterer. The charterer is then responsible for the ship and all expenses necessary for the vessel's operation, including hiring the crew.
  13. Ship brokers
    track the location and status of ships that are open for hire. Paid a commission for setting up a charter with the ship owner.
  14. Nature of air cargo
    high-value, low density.
  15. Advantages of air transportation
    • packaging - less stringent
    • reduced handling costs and provided protection.
  16. Disadvantage of air transportation
    high rates
  17. maritime bridge
    involve railroads both for transcontinental shipments and to and from inland points
  18. land bridge
    substitutes land transportation for part of a container's ocean voyage, taking several days off the transit time and saving in-transit inventory costs.
  19. Foreign Freight Forwarders
    • - Consolidated small shipments into economical container or larger-sized lots
    • Use ocean and air modes
  20. Non-Vessel Operating Common Carriers
    • - Used to disperse traffic moving to and from inland part.
    • - Collects traffic from inland ports back to the ocean port cities
    • - Saves the shippers from having to pay to return empty containers to the ocean carriers
  21. Export Management Companies
    - Knowledeable shippers agent in a foreign country
  22. Export Trading Companies
    • Like EMCs, they export goods and services
    • Allows small and medium-sized firms the ability to compete globally
  23. Customs House Brokers
    - Oversee the movement of goods through customs and ensures that paperwork accompanying a shipment is in order.
  24. Transit Sheds
    provide temporary storage while the goods await the next portion of the journey
  25. In-transit storage areas
    allow the shipper to perform some required operation on the cargo before embarkment (i.e. carrier negotiations, waiting for documentation, packing, crating, and labeling)
  26. hold-on-dock storage
    provided by the carrier to hold until the vessel's next departure date, allowing the shipper to consolidate goods and to save storage cost
  27. Public Warehouses
    Available for extended storage periods.
  28. Bonded Warehouses
    Operated under customs supervisions, designated for storing, repacking, sorting, or cleaning imported merchandise entered for warehousing without paying import duties while the goods are in storage
  29. Packaging
    • - Export shipments moving by ocean transportation require more stringent packaging than domestic shipments normally do
    • - The shipper may find settling liability claims for damage to export goods very difficult. Usually, the freight handling involves many firms, and these firms are located in different countries.
  30. Measure
    Easily defined, needs no calculation, Ex: Unit of inventory, Back order dollar
  31. Metric
    Needs definition, needs calculation or combination of measurements, often in the form of ration, Ex: inventory turns, sales dollars per stock unit.
  32. The Process of Developing SC Performance Metrics
    • 1. Cross-functional team effort.
    • 2. Involve customers and suppliers
    • 3. Tiered structure
    • 4. Identify metric "owners"
    • 5. Mitigate conflicts
    • 6. consistency with the corporate strategy
    • 7. top management support.
  33. The Revenue-Cost Saving Connection
    Revenue = Profit/Profit Margin
  34. Return on Assets formula
    ROA = Net Profit/Total Assets
  35. Return on Net Worth formula
    = Profit/Net Worth
  36. The SC Financial Impact
    • - Satisfactory stockholder return is a major financial objective
    • - Return on net worth
    • - Return on Assets (important for comparing companies within an industry)
  37. What is the financial goal for SC management?
    Increase return to stockholders
  38. Step 1 of Logistics/SC Network Design
    Define the Network Design process: form a design team, establish parameters and objectives, and establish availability of resources and potential involvement of 3PLs
  39. Step 2 of Logistics/SC Network Design
    Perform a Logistics/SC Audit: Develop a comprehensive perspective, gather essential information
  40. Step 3 of Logistics/SC Network Design
    Examine the Logistics/SC Network Alternatives: use modeling to provide additional insights, develop preliminary designs, test model for sensitivity to key variables.
  41. Step 4 of Logistics/SC Network Design
    Conduct a Facility Location Analysis: Analyze attributes of candidate sites, apply screening to reduce alternative sites.
  42. Step 5 of Logistics/SC Network Design
    Make decisions regarding Network and Facility Location: Evaluate sites for consistency with design criteria, confirm types of change needed.
  43. Step 6 of Logistics/SC Network Design
    Develop an Implementation Plan: a road map in moving from current system to the desired logistics network, commit funds to implement the changes recommended by the re-engineering process.
  44. Current trends governing site selection
    strategic positioning of inventories, direct plant-to-customer shipments, growing need and use of strategically located "cross-docking" facilities, greater emphasis on access to major airports and/or ocean ports, use of 3PLs
  45. Optimization modeling approach
    Based on precise mathematical procedures guaranteed to find the "best" solution from among a number of feasible solutions.
  46. Linear Programming (LP)
    Approach of optimization model: useful in linking facilities in a network, defines optimum distribution patterns.
  47. Simulation Modeling approach
    The process of designing a model of a real system and conducting experiments with this model for the purpose either of understanding the behavior of the system or of the evaluating various strategies within the limits imposed by a criterion or set of criteria for the operation of the system. Does not guarantee optimum solution. Either static or dynamic.
  48. Heuristic modeling approach
    Based upon developing a model that can provide a good approximation to the least-cost location in a complex decision problem. Can reduce a problem to a reasonable size. "Grid Technique"
  49. The Grid Technique
    Attempts to locate a fixed facility such that the location represents the least-cost center for moving ibound materials and outbound product within a geographic grid. Finds the ton-mile center of mass - where transportation coss are minimized
  50. Advantages of the Grid Technique
    Simple to use, provides a starting point for further analysis, can accommodate "what if" questions.
  51. Limitations to the Grid Technique
    Static approach, linear rates, no consideration of topography, does not consider direction of movement
  52. Transportation: Tapering Rates
    Rates increase with distance, but not in direct proportion to distance
  53. Transportation: Blanket Rates
    Rates do not increase with distance, but remains the same from one origin to any destination in the blanket area
  54. Transportation: Commercial Zones
    A specific blanket area that includes a municipality and the surrounding area. Impact is at end of location process when a company picks a specific site.
  55. Transportation: Foreign Trade Zones
    Geographic zone into which importers can enter a product and hold it without paying duties, only paying when product enters US customs territory.
  56. Transportation: Transit Privileges
    Permits a shipper to stop a shipment in transit and perform some function that physically changes the product's characteristics.
  57. 8 Categories of reverse flow
    • 1. Products have failed, can be repaired or remanufactured.
    • 2. Products are old, obsolete, or near the end of their shelf life
    • 3. Overstocks
    • 4. Recalled
    • 5. "pull and replace" repair
    • 6. Recycled
    • 7. Products or parts that can be remanufactured and resold
    • 8. Scrap metal that can be recovered and used as a raw material for further manufacturing
  58. Reverse Logistics
    • the process of moving or transporting goods from their final desitnatino for the purpose of capturing value or for proper disposal
    • - involves the processes for sending new or used products "back upstream" for repair, reuse, refurbishing, resale, recycling, or scrap/salvage
  59. Closed loop supply chains
    designed and managed to explicity consider both forward and reverse flows activities in a supply chain. nothing is wasted
  60. Forces Impacting Reverse Logistics
    • -Customer Returns
    • - Environmental Challenges
    • -Economic Value
  61. Barriers to Reverse logistics program implementations
    Listed on PG 636: can be internal (no top management support, not enough financial resources, not enough personnell, etc.) or external (local, state, and federal restrictions and/or regulations)
  62. Recommendation for managing reverse flows in a supply chain - AVOIDANCE
    Producing a high-quality products and developing processes to minimize or eliminate returns
  63. Recommendation for managing reverse flows in a supply chain: GATEKEEPING
    checking and screening merchandise at the entry point into the reverse flows process to eliminate unnecessary returns or minimize handling
  64. Recommendation for managing reverse flows in a supply chain - REDUCING REVERSE CYCLE TIMES
    analyzing processes to enable and facilitate compression of time for returns to enhance value recapture
  65. Recommendation for managing reverse flows in a supply chain - INFORMATION SYSTEMS
    developing effective information systems to improve product visibility, reduce uncertainty, and maximize economies of scale
  66. Recommendation for managing reverse flows in a supply chain - RETURNS CENTERS
    developing optimum locations and facility layouts for returns centers to facilitate network flow
  67. Recommendation for managing reverse flows in a supply chain - REMANUFACTURE AND/OR REFURBISHMENT
    preparing and repairing a product for resale as is usually done in closed loop supply chains to maximize value recapture
  68. Recommendation for managing reverse flows in a supply chain - ASSET RECOVERY
    classifying and disposing of returned items, surplus, scrap, and obsolete items to maximize returns and minimize cost
  69. Recommendation for managing reverse flows in a supply chain - PRICING
    negotiating the best price for products being returned and resold
  70. Recommendation for managing reverse flows in a supply chain - OUTSOURCING
    considering a relationship with a third-party organization to handle and manage reverse flows in cases where existing personnel, infrastructure, experience, and/or capital may not be adequate to implement a successful program
  71. Recommendation for managing reverse flows in a supply chain - ZERO RETURNS
    developing a policy to exclude returns by giving a returns allowance and/or "destroying" the product in the field
  72. Recommendation for managing reverse flows in a supply chain - FINANCIAL MANAGEMENT
    developing guidelines and financial procedures to properly account for charges against sales and related financial issues when items are returned by customers.
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Logistics Exam 3
Flashcards for Logistics Exam 3