Business Management Unit 6

Supply and Logistics Function Goal

Aimed at planning and inventory control of the company.

Inventory (Definition)

A set of items stored pending its subsequent use; considered an investment as these are idle resources.

Types of Inventories

Raw materials, work in progress (products in progress/semi-finished), or finished products.
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Supply Management Objective

To acquire raw materials, components, and machinery necessary for the production process while meeting quality, cost, and time priorities.

Logistics Management (Scope)

A wider concept than supply management, starting with raw materials and ending with the delivery of finished products to customers .

Integral Logistics (External)

Refers to the coordination of all activities throughout the entire supply chain.
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Internal Logistics

Coordinated management of movement and storage of materials within procurement, production, and distribution functions of one firm.
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Supply Chain (Definition)

The process and set of companies through which materials flow from suppliers to end customers .

Inventory Planning Factors

Determining when and how much to order, considering demand, delivery time, and various costs (possession, rupture, acquisition) .

Production Function (Technical Perspective)

The transformation processes that turn inputs into outputs.

Production Function (Economic Perspective)

Processes oriented toward obtaining goods or services aimed at satisfying human necessities.

Project Production Systems

Developing unique, complex products or services under specific customer request.

Continuous Flow Manufacturing

A production flow where the same operations always run on the same machines to obtain the same product.

Mass vs. Batch Production

Mass involves large batches of few technically homogeneous products; Batch involves larger batches and more uniformity than handcrafted but less than mass .

Marketing (Definition)

Process of planning and executing product concept, price, promotion, and distribution to create exchanges satisfying individual and organizational goals.

Market Research

The design, collection, and analysis of data relevant to solving a specific marketing problem .

Market Segmentation

Dividing consumers into homogeneous groups to design a differentiated marketing strategy for each.
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The 4Ps of Marketing

Product, Price, Promotion, and Placement (Distribution) .

Price Strategy Factors

Includes legal framework, competitors, company goals, price elasticity, and the product life-cycle .

Promotion Objectives

To inform (characteristics), persuade (potential buyers), and remember (existence and advantages) .

Placement (Distribution) Strategic Decisions

Design of distribution channels (intermediaries) and location/size of points of sale (selective, exclusive, intensive) .

Utilities created by Placement

Placement adds value by creating place utility, temporal utility, and utility of possession