Logistics Management Flashcards (INSC 30653)

Vocabulary terms and key formulas from Lecture 10 on Logistics Management, focusing on transportation modes, distribution center operations, and cost calculations.

Logistics Management

The process that plans, implements, and controls the movement and storage of goods, services, and information to meet customer needs and organizational objectives.

Order Processing

A system designed to ensure accuracy, efficiency, and speed in facilitating the ordering process for the customer.

Economic Regulation

Government regulation that governs the entry of new carriers, the rates charged, and the services provided.

Safety Regulation

Government regulation governing safety for carriers and the public, with an increased emphasis on security from terrorist activity.

Economies of Scale and Distance

Concepts that drive the market towards freight consolidation by taking advantage of spreading activity over the fixed costs associated with the transportation medium.

Freight Consolidation

A large shipment made of many smaller shipments.

Consolidation by Market Area

Combining small shipments from one shipper going to the same area.

Pooled Delivery

Combining small shipments from different shippers going to the same area.

Scheduled Delivery

Combining orders over time for delivery at specific times.

Trucking

The most flexible mode of transportation which handles $70\%$ of all transportation.

Rail

The second most common method of transportation.

Water Transportation

The transportation mode with the largest capacity, but heavily restricted by geography.

Pipeline

A point-to-point transportation mode used for fluid products.

Air Transportation

The most expensive transportation mode, typically reserved for higher value items with lower volumes.

Last Mile

The final and often most challenging element of transportation involving manual delivery of a small number of items to the end customer.

In-transit inventory holding cost (Formula)

\text{# of days in-transit} \times \frac{\text{Shipment value} \times \text{Annual inventory carrying cost percentage}}{365}

Total cost for GROUND (Example 11-2)

$$[(8\, \text{days}) \times (\$15,000 \times 0.20) / 365] + \$50.00 = \$115.75$$

Total cost for AIR (Example 11-2)

$$[(2\, \text{days}) \times (\$15,000 \times 0.20) / 365] + \$90.00 = \$106.44$$

Stockpiling

A Distribution Center operation involving the storage of inventory in warehouses to protect against seasonality in either supply or demand.

Production Support

A Distribution Center operation dedicated to storing parts and components needed to support a plant’s operations.

Break-Bulk

A transshipment process involving splitting a shipment into individual orders and arranging for local delivery to customers.

Fulfillment Centers

Facilities designed specifically for processing and shipping packages to individual homes or businesses.

Reverse Logistics

The process where material moves upstream in the supply chain, which is especially important in online retail.

Value Added Services

Providing additional value to the customer within a Distribution Center, such as postponed manufacturing.

Material Handling

Devices of many forms intended to facilitate moving product safely and efficiently.

Packaging

Items intended to protect products while they are within the logistics system, influenced by branding, sustainability, and intelligent packaging.

Intelligent Packaging

Packaging technologies including Radio Frequency ID (RFID) and Near Field Communication (NFC).

Logistics Network Design

The strategic implementation of a distribution strategy to optimize logistics costs and customer experience, including the number/location of facilities and transportation modes.