Introduction Service Traffic and Transportation Storage and Warehousing Inventory Management

1. Introduction Service Traffic and Transportation Storage and Warehousing Inventory Management Location Decisions Logistics Systems Analysis and Design Organization

2. Introduction Can you define logistics using the definition discussed in class or that of the CSCMP? Do you understand the difference between a logistics manager and a manager of various functions such as traffic and/or warehousing? Can you discuss five major factors that led to the development of Business Logistics? Can you discuss the major contributions of the Harvard Air Freight Study?

3. Service Can you discuss four basic elements of service (i.e., order cycle time, dependability, convenience, communication)? Do you understand the need for defining very specific service measures when dealing with customers and can you identify several specific measures related to the four basic elements mentioned above? Do you understand the importance of being able to estimate the relationships between cost and service and between revenue and service? Can you determine an optimal service level if estimates of the parameters of revenue and cost are provided?

4. Traffic and Transportation Can you discuss Value of Service/Differential Pricing in terms of what it is, the motives for using it, and when it is profitable? Do you understand the concept of a weight break and can you determine one if given rates for two different volumes to common destinations? Can you determine whether it is best to ship via LTL or TL with stops, given different rates to different destinations? Did you review the Kohners Manufacturingcase?

5. Storage and Warehousing Can you give five reasons why warehouses are used? Can you determine mathematically the indifference point between public and private warehousing? Can you adjust that indifference point to account for your return on investment if given a hurdle rate? Can you determine whether it is best to ship direct to a market via LTL or to use a warehouse supplied by TL, with customer deliveries made via Local Cartage? Could you determine an LTL at which you would be indifferent between the two options? Did you work through the Timberlane Foods case?

6. Inventory Management Can you determine an Economic Order Quantity? Can you determine if cheaper transportation rates would justify shipping larger inventories? Can you determine whether or not quantity discounts would justify holding larger inventories? Can you determine whether transit times by the various modes would affect your decision? Can you determine whether more reliable transit times would offset more expensive transportation costs? Did you review the Chard Appliance (B) case?

7. Locations Decisions Can you explain the difference between and the significance of the Majority theorem and Hakimi’s Theorem? Can you solve a single source problem on a grid? Can you discuss the relevant costs associated with determining the optimal number of warehouses and show their behavior graphically? Did you review the Eastman Brewery case?

8. Logistics Systems Analysis and Design Can you determine whether or not it is economical to consolidate inventory into fewer warehouses and incur higher transportation costs due to premium shipments? Do you understand the value of information in a logistics system and how abuse of an information system can allow inefficiencies to exist? Did you review the Massey Corporation case?

9. Organization Can you explain the concept of sub-optimization? Can you discuss the underlying reasons for sub-optimization in organizations? Can you discuss methods of overcoming sub-optimization? Did you review the Wolfe Oil Companycase?