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Distribution planning and management industry warehouse operation Inventory management and inbound and outbound transportation Linkage with the customer service, sales, promotion, and marketing activities.
Physical Distribution
Portion of a logistics system concerned with the outward movement of productions from the seller to customer or consumer.
Physical Supply
The portion of a logistics system concerned with inward movement of materials or products from sources or the suppliers.
Distribution
The combination activities and institutions associated with the advertising, sale, and physical transfer of products and services. It is concerned with broader matters than logistics alone.
Integrated Logistics
Integrated logistics management can improve both cost and customer service performance. The total cost concept of logistics is based on the interrelationship of supply, manufacturing, and distribution costs.
Ordering, inventory, transportation, production setup, warehousing, customer service and other logistics costs are interdependent
Example
Seasonal demand (400, 700, 500, 300) Inventory level (450, 750, 550, 350)
To meet the inventory level, the production should be changed. (450, 700, 500, 300) Inventory cost $10 per 50 units
Level of production
Production costs $1,000 per 600 units
Decide the method either inventory level model or level of production model.
Seasonal Demmand Inventory Level Seasonal Production Inventory Amount Inventory Costs production cost
400 700 500 300 450 750 550 350 450 700 500 300 50 50 50 50 $ 10.00 $ 10.00 $ 10.00 $ 10.00 $ 1,000.00 $ 2,000.00 $ 1,000.00 $ 1,000.00
Level Production 600 600 600 600 Level Production Cost $ 1,000.00 $ 1,000.00 $ 1,000.00 $ 1,000.00 Inventory Amount 200 100 200 500 Inventory Cost $ 40.00 $ 20.00 $ 40.00 $ 100.00
Example 2
Regional stocking
Warehouse cost vs. bulk transportation price
Transportation cost
Functional Integration
Businesses manage their activities through functional groupings
sales, marketing, manufacturing, finance, distribution
The functional excellence could be measured by higher sales, lower transportation costs, lower inventories, or better control of operations.
Dynamic environment
Demand uncertainty, significant seasonality, short product life cycles, or high competitive intensity Companies that organize for functional integration tend to outperform those that are organized for functional excellence.
Pipeline Analysis
The effect of long production runs and manufacturing lead times on system inventory. The impact of marketing promotions on operating costs and on effective net margins. The cost of or savings available from transportation consolidations. The cost of multiple handling through a multiechelon warehouse network.
Fluid Distribution
Inventory visibility
point-of-sale information to monitor usage rtes at the retail level