Important Vocab Ch 15

Logistics Management

includes management of inbound and outbound transportation, material handling, warehousing, inventory, order fulfillment and distribution, third-party logistics and reverse logistics.

Supply Chain Integration

means that all the different parts of a business—and its partners like suppliers and delivery companies—work closely together and share information to make sure everything runs smoothly.

Goal of Supply Chain Integration

is to connect supply (what the business gets and makes) with demand (what customers want) so the right products are made and delivered at the right time.

Many Suppliers

Businesses buy from the cheapest supplier, and each supplier is fully responsible for doing the job well.

Few Suppliers

The business sticks with a few trusted suppliers to build strong partnerships, improve quality, and work more efficiently—but switching suppliers later can be difficult.

Vertical Integration

means a company takes over more steps of its supply chain instead of relying on others.

Forward Integration

The company takes control of selling its own products to customers.

Backward integration

The company starts making the things it used to buy from suppliers.

Joint Ventures

is when two or more companies team up to work on a project or business together. They share resources, skills, and costs, but each company keeps its own brand and independence.

It helps them learn from each other, lower costs, and secure supplies, without giving up control of their own company.

Cost-based price model

The price is set based on how much it costs to produce something, plus a bit more for profit.

market-based price model

the price is determined by the market, based on what others charge and what customers are willing to pay.

• based on published, suction, or indexed prices

competitive bidding

—- is when a company invites multiple suppliers to offer their best prices, and the business chooses the most suitable one.

• common policy for many purchases

• does not generally foster long-term relationships

Multimodal Shipping

One company, multiple transport types

Intermodal Shipping

multiple companies, multiple transport types.

Consolidation

means combining small shipments into one big shipment to save money and space.

break-bulk

Take one big load and break it into smaller ones for delivery.

Third-Party Logistics (3PL)

means a company hires another business to handle things like shipping, warehousing, and delivery instead of doing it themselves.