CLTD
ISO 31000
A standard adopted by the International Standards Organization that outlines principles and a set of guidelines to *manage risk* in any endeavor. The standard includes guidelines for understanding risk, developing a risk management policy, integrating risk management into organizational processes (including accountability and responsibility), and establishing internal and external risk communication processes.
United Nations Global Compact
A voluntary initiative whereby companies embrace, support, and enact, within their sphere of influence, a set of core values in the areas of human rights, labor standards, the environment, and anticorruption.
anticipation inventory
Additional inventory above basic pipeline stock to cover projected trends of increasing sales, planned sales promotion programs, seasonal fluctuations, plant shutdowns, and vacations
ISO 22301
An international standard that specifies requirements for setting up and managing an effective *Business Continuity Management System*
Harmonized System Classification Codes
An internationally standardized description of goods that uses a system of numbers to provide increasingly detailed classification and descriptions (180 countries have adopted this, 98% of the world's trade)
Trade bloc
Any association of one or more countries where an agreement is made to reduce trade barriers
Resource planning
Capacity planning conducted at the business plan level. The process of establishing, measuring, and adjusting limits or levels of long-range capacity.
Bill of lading
Carrier's contract and receipt for goods carrier agrees to transport from one place to another and deliver to designated person; basis for filing freight claims
cost of service pricing
prices are determined by using the avg. or marginal costs the incur for providing a trans service; sometimes results in dissimilar pricing, which enables fixed and common costs to be spread out over high volumes of traffic; often sets the floor for carrier pricing
Order fulfillment cycle time
process time + dwell time
Master contract
lays out the general provisions of a long-term agreement and governs most of the details of future individual contracts or purchases for a period of time
Cycle time
length of time from when materials enter a production facility until it exits
Operational stability implies stable demand and processes through __________.
leveling, standardized work, and process improvement through kaizen
Commerce Control List (CCL)
lists all products that are of concern if exported to other countries
Straight-line approach to distance calculation
measure the distance between two points w/ a straight line, then multiply by a "wiggle factor" (standard is 1.2)
Feeder vessel movements
moves from smaller ports to major ports for exports, and from major ports to small ports for imports
Commercial invoice
official document indicating the names of the seller and buyer, the product being shipped, and its value
Market structure of pipelines
oligopolistic
LLPs (Lead Logistics Providers)
orgs that oversee 3PL operations of their clients; often seen as boundary between 3PL & 4PL as they are an asset-based provider who offers mngmnt servies for the goods they own as well as for other logistics providers
takt time
pace of production needed to meet customer demands
Process value chain
physical supply
Slowest type of trans
pipeline
Value of Service Pricing
profit-maximizing approach; carriers charge based on product's unique demand traits; often sets high end of carrier pricing
Bill of Exchange Payment
promissory note that the importer uses to formally acknowledge its debt to the exporter importer signs in front of presenting bank's reps; considered a legal doc in importer's country
pro forma invoice
quote provided by a seller prior to the delivery of products, informing the buyer of the price; submitted to customs for valuation purposes speeds up customs process
Int'l Air Transport Association (IATA)
represents 260 airlines that make up 85% of air traffic
Trade Act of 2002
requires exporters to submit shipping docs no later than 24 hrs after cargo has been delivered to a marine terminal and at least 24hrs prior to the vessel's departure
"10 + 2" Rule
requires importer to provide US Customs w/ info 24 hours prior to departure to first US port
Customs-Trade Partnership Against Terrorism (C-TPAT)
requires most consolidators & ocean carriers to file cargo manifests electronically w/ customs a min of 24 hrs before cargo is loaded on a vessel heading to US
Anti-Bribery Convention of the Organization for Economic Cooperation and Development
requires nations to charge penalties to orgs using bribery
DAP (Delivered at Place)
seller delivers goods and buyer receives them when they are ready for unloading
FCA (Free Carrier)
seller delivers goods to main carrier; buyer loads
DAT (Delivered at Terminal)
seller delivers goods to terminal
DDP (Deliver Duty Paid)
seller incurs all costs, including import duty
CIF (Cost, Insurance, and Freight)
seller pays main carriage and insurance
CIP (Carriage and Insurance Paid To)
seller pays main carriage and insurance
FOB (Free on Board) WATER
seller puts goods on main transport vessel
CPT (Carriage Paid To)
seller selects and pays for main carriage
CFR (Cost and Freight) WATER
seller selects/pays main carriage
ISO 14000 Standards
series of generic environ mngmnt standards that provide structure and systems for managing *environ compliance* w/ legislative and regulatory reqs and affect every aspect of a company's environ operations
Waybill
serves as evidence that the consignee has contracted w/ the shipper to carry the goods to an identified destination; transport receipt
Int'l Traffic in Arms Regulations (ITAR)
set of US gov regulations on the export and import of defense-related articles and services
consular invoice
special invoice used for goods being sent to the importer's country
Carnet
temporary admission for goods that are passing through a country rather than being imported (disposable and consumable goods are excluded)
Lean supply strategies
1. short lead time & predictable demand: lean w/ continuous replenishment 2. long lead time & unpredictable demand: leagile 3.long led time & predictable demand: lean w/ forecasting make-to-stock 4. short lead time & unpredictable demand: agile
Methods of determining customer profitability
1. single allocation criteria: costs of direct material, labor, and overhead 2. activity-based costing: identify specific costs of serving each customer 3. cost-to-serve: identify costs of the different business activities w/in each stage of the supply chain as well as the overhead costs associated w/ each customer
2 components of milk runs
1. stem time: time between when a driver leaves the terminal until the first pickup, and when the last pickup until arrival back at terminal 2. run time: time driver is actively involved in pickup
8 forms of waste
1. trans 2. inv 3. motion 4. waiting 5. overproduction 6. overprocessing 7. defects 8. skills
3 factors impacting int'l logistics
1. trend of selling complementary products together 2. proliferation of alternative options for carriers 3. common presence of substitute products
Duties are based on:
1. type of goods 2. value of goods 3. country
4 elements of JIT
1. zero inventories 2. short, consistent lead times 3. small and frequent replenishment of inv 4. high quality (zero defects)
SCM over time
1960s: silos 1980s: inbound/outbound integration 1990s: total logistics integration 2000s: supply chain mgmnt
Evolution of 3PL services
1970s-1980s: outsourcing limited to trans and warehouse; short-term transaction 1980s-1990s: non-asset based companies, # of asset-based companies increased, value-added service offerings 2000s and beyond: online freight marketplace, higher outsourcing & increased integration
% of operating costs in airline industry that are fuel
34%
OBC (Onboard courier service)
3rd party service that flies w/ critical item; checks item as a "bag"
Water transport is responsible for what % of total freight revenue?
50%
What % of US roads are paved?
67%
What % of revenue does airfreight transport generate for air companies?
9%
What % of total weight is water transport responsible?
90%
Air waybill (AWB)
A bill of lading for air transport that serves as a receipt for the shipper, indicates that the carrier has accepted the goods listed, obligates the carrier to carry the consignment to the airport of destination according to specified conditions
export license
A document received from a governmental agency authorizing a certain quantity of an export to be sent to a given country; govs normally require this to control foreign trade for political and military reasons
Certificate of Free Sale
A document that attests that the product exported conforms to all of the regulations in place in the exporting country and that it can be sold freely in the exporting country
hedge inventory
A form of inventory buildup to buffer against some event that may not happen
Global Reporting Initiative (GRI)
A network-based organization that pioneered the world's most widely used sustainability reporting framework.
Demand management process
A process that weighs both customer demand and a firm's output capabilities, and tries to balance the two. Demand management is made up of planning demand, communicating demand, influencing demand, and prioritizing demand.
Monte Carlo Simulation
A process which generates hundreds or thousands of probable performance outcomes based on probability distributions for cost and schedule on individual tasks; the outcomes are then used to generate a probability distribution for the project as a whole
Logistics ethics
1. philanthropy 2. diversity 3. human rights 4. safety 5. environment
Logistics includes _______.
1. physical supply 2. materials mngmnt 3. distribution
3 types of logistics strategies (value propositions)
1. process 2. market 3. information
Demand elasticity
% change in quantity demanded / % change in price this typically doesn't affect trans.
Load factor
% of a plane's capacity being used (determined by dimensions)
Inv. turnover
(COGS / avg. inv. costing period) (Sales revenue / avg. inv. @ selling price) (Units sold / avg. unit inv.)
Inventory days supply
(Inventory/annualized COGS) * 365
Exponential smoothing
(a x last period's demand) + [(1-a) x last period's fcst]
rated capacity
(avail. time)(utili. rate)(effic. rate)
Liquidity ratio
(current assets - inventory) / current liabilities
Strategic Planning
- 3-5 year horizon -customer service levels -dist. channels -supply locations
Tactical Plannig
- 6 - 12 month horizon -layout and design -inventory location method -handling process -order processing
Certificate of Free Sale
-attests that the goods can be legally sold in the country of export -prevent defective products from being exported
Categories of forecast variation
-common cause (general) -special cause (assignable): trends, seasonality, cycles, etc
Operational Planning
-daily -receiving goods -inventory replenishment -load planning
ISO 50001
-defines *requirements for designing, implementing, and maintaining an EMS* -documentation, reporting and procurement guidance
6 options for returned items
1. return to stock 2. return to manu or producer 3. liquidate 4. donate 5. recycle 6. destroy
Total cost concept
idea that all logistical decisions provide equal service levels should favor the option that minimizes total of all logistics costs
Import License
import country's gov doc that provides an importer with the express authorization to import a particular product
Inventory review approaches: Continuous
inventory is checked whenever a change in inventory level occurs
Days inventory outstanding
inventory on hand / avg. daily use
Free and Secure Trade (FAST)
-facilitates the quick processing of manifests -companies part of this need to have manifests at the border 30 minutes before arrival of shipments; those outside of program must have them 1 hour before arrival
Weeks supply
inventory on hand / avg. weekly use
House Bill of Lading
issued by a NVOCC, consolidator, or freight forwarder (aka groupage document or certificate)
Theory of Comparitive Advantage
- David Ricardo - 1817 -considers the ability of a country to produce a particular good at a lower margin as well as lower opportunity cost over another
Heckscher-Ohlin Factor Endowment Theory
- Heckscher & Ohlin - 1933 -a country will have comparative advantage over others, even when technology is the same, due to one of four factors: labor, capital, land, or the entrepreneurship present in its people
Inventory review approaches: Periodic
-fixed period review -more useful for slow-moving, bulk items and items ordered in product families
Logistics Cluster Theory
- Yossi Sheffi - 2012 - concentrating logistics service providers in a geographic area morphs it into a strong, financial hub for manu
Payment method risks
- Open account: risk is on seller - Cash in advance: risk is on buyer - Letter of credit, sight draft, & time draft: risk is shared
Authorized Equipment Operator (EU)
-allows member-states of EU right to grant AEO states to any org who passes thorough business audit and qualifies w/in EU rules on customs compliance, comm. and trans. record keeping, financial solvency, & security and safety standards
RFP/ITT includes the following info:
- statement of requirement -statement of purpose -background info -scope of work -performance standards -delivery schedule -contract terms and conditions -payments, incentives, and penalties
5 types of fulfillment channels: Manufacturer to DC to Retailer
- traditional supply chain -inventory-intensive method as all echelons need inventory -*best for mass-produced, inexpensive goods w/ high competition* -produces strong product availability and high levels of customer service
SCOR Model
-*P*lan: balance supply & demand in a plan that meets source, make, & delivery reqs -*S*ource: procuring goods & services to meet demand -*M*ake: transforming products into FGs -*D*eliver: providing FGs & services to meet demand using order, trans, & distribution mngmnt -*R*eturn: returning or receiving inv., & post-delivery customer support -*E*nable: mnging relationships, performance, & info in SC & interaction w/ all above
How deep do channels need to be to accommodate most ships?
-15.25 meters -2.7 meters for barges
Sea vessel types
-Handysize: dry-bulk shipments w/ 10,000 to 50,000 deadweight ton range -Capesize: large dry-bulk ships that are too large to fit through Suez Canal and must pass by the Cape of Good Hope South Africa -Very large crude carrier (VLCC): oil tankers w/ capacity up to 300,000 deadweight tonnage -Ultra-large crude carrier: oil tankers w/ capacity of more than 300,000 deadweight tonnage; remain in deep sea -Offshore vessel (OSV): specially designed ship for transporting goods & personnel to remote areas; can act as Platform Supply Vessels (PSV), supplying offshore oil platforms
Cluster Theory
-Michael Porter - 1990 -firm can develop a competitive advantage in manu of certain products when it's geographically close to its suppliers and competitors
Canal max weights
-Panama Canal: deadweight <125,000 long tons -Suez Canal: deadweight <200,000 metric tons
Int'l Product Life Cycle
-Raymond Vernon - 1966 1. Product is designed to satisfy a market need in a developed country; exporting begins 2. Sales in secondary group of developed countries gain momentum, and imitation products come; popularity comes to upper income segments of developing countries 3. Production runs smoothly, focus becomes lower production costs. Markets in developing countries are reaching critical mass
SCOR 12.0 Performance Attributes
-Reliability -Responsiveness -Agility -Costs -Asset mngment first 3 are customer facing, last 2 are inward facing
GRI G4 Reporting framework
-Reporting Principles & Standard Disclosures: what to report -Implementation Manual: how to report
FMCSA: "Roadability Rule"
-Requirements for intermodal equipment providers 1. register assets 2.establish a systematic inspection, repair, and maintenance program 3. document maintenance program 4. provide means to respond to defective equip
Vessel operating common carrier (VOCC) vs non-vessel operating common carriers (NVOCC)
-VOCC: operate its own vessel & transport cargo between 2 countries; asset based common carrier -NVOCC: consolidator of ocean freight shipments that operate similarly to a freight forwarder and issue its own BOLs, thus acting as a carrier even though it does not own the means to transport goods
Heuristics
-form of problem solving in which the results or rules have been determined by experience or intuition instead of by optimization -using experimentation to find an answer; trading accuracy for speed and ease of calculation -used to narrow down many solutions so a problem is easier to define
Types of pipelines
-gathering lines: pull in crude oil, natural gas, and other liquid cargo (diameter <6 in) -trunk lines: pull oil from gathering lines and move it to refineries (8 - 10 in) -refined product pipelines carry petroleum products from refineries to storage tanks (8 - 12 in) -distribution pipelines move natural gas from a DC into homes, businesses, etc (1/2 - 6 in)
ISO 14004:2004
-guidelines for specific elements of *EMS* and its implementation -environ auditing
ISO 14001:2015
-holistic approach to orgs environ policy, plans, and actions -requires orgs to be committed to compliance w/ applicable legislation and regulations and want to continuously improve -emphasizes incorporating environ mngmnt into strategic planning and leadership and proactive implementation of sustainable practices *can be certified by external authority*
5 types of fulfillment channels: Independent distributor w/ omni-channel network
-independent distributor is the channel master, buying goods from multiple manu. in bulk and aggregating them for a one-stop shop for customers -use assortment of TL & LCL -holds high inventory levels of fast moving items -need thorough & efficient trans network and sometimes have value added services
KPI types
-leading indicator: activities that will create future performance -lagging indicator: gauges level of past performance -diagnostics indicator: reflect overall health and financial position of org
World Customs Organization (WCO)
-made up of 161 members -Int'l Ship and Port Facility Code (ISPS): secures ships in transit and shipping ports by specifying risk mngmnt activities -Safety of Life at Sea Convention (SOLAS)
5 types of fulfillment channels: Manufacturer storage w/ direct delivery
-manu. takes customer order through any # of sales channels & directly ships goods to the customer (w/ no intermediaries) -common in B2B settings -*used for low variety make-to-order goods that customer can wait a long time for; large lot sizes*
5 types of fulfillment channels: Manufacturer storage w/ drop ship
-manu. takes customer orders from customer and customer receives goods directly from the manu. -use transload and cross-dock facilities -*best for high value, sporadic items; can be make-to-order, customized, or postponed items that can be finished when the order arrives* -higher trans. costs due to more smaller shipments
Reactive freight consolidating
-market area -scheduled delivery area -pooled delivery
Mini vs micro land bridge
-mini: reach a destination across a country -micro: reach inland desitination
Certificate of Origin (COO)
-must be signed by exporter's Chamber of Commerce -used by importer's country to specify tariff
Proactive freight consolidation
-preorder planning -multivendor consolidation
Economic Co-operation and Development (OECD) convention
-requires nations to charge penalties to organizations using bribery -instructs the governments of developed countries to no longer allow firms to deduct bribery as a business expense
CSM elements
-responsiveness: listening to customer -information: address customer questions -confidentiality: protecting info -capability: those answering questions have experience w/ product -integrity: being straightforward and honest -consistency -dependability: steady commitment to specific level of cust. service
Sea weights & measurements
-short ton: 2000 lbs -long ton: 2240 lbs -volumetric tonne: 100 cubic ft -deadweight is calculated w/ these
5 types of fulfillment channels: Independent aggregator w/ e-business network
-similar to omni-channel network set up, but relies more on direct marketing to individuals through its own heavily branded website (ex. Amazon) -direct shipping through parcel services is common -often use loyalty programs -need high levels of customer service
Rail gauges
-standard: 4 ft 8.5 inches -broad gauge: 5 ft -narrow gauge: less than 3.5 ft
Main costs associated w/ determining TCO
-vehicle fixed costs -vehicle variable costs -OH costs
Charter carrier types (sea)
-voyage charter: one voyage w/ specific cargo from a certain origin to certain destination -time charter: any # of voyages w/in specific time frame
Proximity notes
-weight-losing products are best processed near the source of supply to save on trans costs -weight-gaining products are best manu. near source of demand
AEO 3 Certificates
1. AEOC: grants priority status and customs simplifications (no reexamination to get customs simplification, fewer docs and customs controls, priority treatment, can specify where control will be performed) 2. AEOS: grants security and safety (prior to arrival or departure, customs can warn of physical reviews, shorter forms for entry/exit summary declarations, fewer security and safety docs) 3. AOEC and AEOS
Inventory costs
1. Acquisition costs: unit cost, ordering cost (handling & setup) 2. Carrying costs: capital cost, taxes, storage, risk exposure, & insurance 3. Stockout costs: immediate loss of revenue, damaged customer relations, damaged reputation, & lost future revenue
Stages of SC integration
1. Baseline: internal silos 2. Functional integration: materials mngmnt, manu, & dist. integrate, but everything else isn't 3. Internal integration: internal logistics is fully integrated 4. External integration: forming relationships w/ outside partners
4 aspects of buying experience
1. Communication 2. Time 3. Dependability 4. Flexibility
S&OP Steps
1. Data gathering: update forecast 2. Demand planning: determine/update demand #s 3. Supply planning: generate production plan 4. Pre-executive meeting: identify areas where consensus can be reached w/out executives and what needs executive input 5. Executive meeting: provide info to execs
UN Global Compact 10 Principles
1. Human Rights: Businesses should support & respect protection of human rights 2. Human Rights: Not complicit to human rights abuse 3. Labor: Uphold freedom of association and right to bargaining 4. Labor: Eliminate all forms of forced labor 5. Labor: No child labor 6. Labor: Eliminate discrimination 7. Environ: Support precautionary approach to environ. challenges 8. Environ: Take initiative to promote environ responsibiity 9. Environ: Promote environ friendly tech 10. Anti-corruption: work against corruption
Satisfaction measurements
1. Process: level of performance by which a product or service is *delivered* to customer (ex. total order cycle time, customer complaint stats, damaged goods, billing adjustments) 2. Product: indication of how a product conforms to quality and design specs (ex. attractiveness, ease of use, failure rate) 3. Satisfaction: customer's perceptions of product quality and service (ex. customer access to inventory status, response to customer complaints, customer feedback cards)
Planning and Scheduling Hierarchy
1. Strategic Planning 2. Business Planning 3. S&OP 4. MPS 5. MRP
SCOR Levels
1. Strategic-level metrics, scope, and content of supply chains; competitive basis of org 2. Operational strategy metrics (ex. make-to-stock or make-to-order) 3. Individual processes & execution of strategy, defining processes, process performance, practices, tech, capabilities, and staff skills 4. Org. defined metrics: industry, company, & location specific metrics; "critical success factors"
Activities involved in global transportation can be grouped by focus into 3 groups
1. Transaction channel: point of ownership transfer, freight control, payment terms, securing payment 2. Communication channel: visibility and control of shipment w/ the right trade docs as it travels between countries 3. Distribution channel: mngmnt of risk of disruption of shipment mvmnt by optimizing use of reliable mode, carrier, and route
4 most important performance capabilities of trans design
1. accessibility 2. transit time 3. reliability 4. product safety
Impact of adding DCs
1. base stock levels will remain constant 2. safety stock will rise, but will taper off eventually 3. base stock per DC will lower 4. safety stock will lower per DC, but increase overall 5. reduced order cycle time and variability
TCO factors that favor buy
1. better agility 2. better resilience 3. reduced capital expenditures 4. focus on core competencies 5. new ways of thinking 6. access to new markets 7. expertise and mngmnt complexity
Responses to risk that address many risk simultaneously
1. building redundancy 2. investing in visibility 3. packaging goods properly
3 types inv. carrying costs
1. capital: physical inv. 2. service: inv. mngmnt & insurance 3. risk: pilferage, damage, etc
5 components that impact freight demand
1. carrier capability 2. transit time 3. consistency 4. direct service 5. cargo protection
Production planning types
1. chase strategy: increase or decrease production to match seasonal or other fluctuations in demand 2. level strategy: steady amount through year 3. hybrid: employs both
3 ways logistics professionals add value
1. creating competitive advantage 2. reducing costs of trans, labor, & inv 3. improving customer experience and SLs
Methods for calculating rates
1. cube rate: volume 2. commodity rate 3. exception rate: change or deviation from class rate 4. freight-all-kinds (FAK) rate: rate charged for goods that are pooled and shipped together
Assigning a rate tariff
1. determine freight class 2. determine weight, shipment origin, and destination
7 drivers of trans pricing
1. distance 2. weight 3. density 4. stowability 5. handling 6. liability 7. market
3 main principles of trans
1. economy of scale 2. economy of distance 3. cost of velocity
Dangerous Goods Classifications
1. explosives 2. gases 3. flammable liquids 4. flammable solids 5. oxidizing substances 6. toxic substances 7. radioactive material 8. corrosive substances 9. misc dangerous goods
Methods of global entry
1. exporting 2. indirect exporting 3. licensing 4. direct ownership and production abroad 5. joint ventures
Outside service provider categories
1. express: operations that emphasize speed 2. groupage: consolidation services 3. general haulage: traditional method of outsourcing 4. multi-user: shared-user distributor; works for multiple clients 5. dedicated: complete logistics provided
2 main types of OH in trans
1. fleet OH: costs of reserve equip and labor 2. business OH: admin & trans department expenditures
Network design process
1. form project team and scope 2. identify drivers for change 3. audit the as-is network 4. assess network alternatives 5. plan facilities 6. finalize the to-be state 7. develop the implementation plan
Common demand strategies
1. growth 2. portfolio 3. positioning 4. investment
4 sources of performance standards
1. historical standards: looking at past records 2. predetermined or public standards: published by 3rd parties 3. work sampling: analyzing task requirements to determine standards 4. regression analysis: applying different variables to a task to see their effect on time or cost
Steps in risk management
1. identify and document risk 2. categorize and prioritize risk (probability X impact) 3. quantitatively analyze risk (EMV = probability X $ impact & value at risk (VAR) = probability X net $ impact) 4. pick a basic response (accept, avoid, transfer, mitigate) 5. develop preventive and contingent action plans 6. implement plans 7. regularly meet to review
What costs make up total logistics costs?
1. local delivery costs 2. primary transport costs 3. dist. center storage costs 4. inv. carrying costs 5. info. system costs
Reducing cycle time advantages
1. one-time cost savings in avg. inventory level reduction 2. ongoing annual savings b/c inv levels in inv carrying costs will be lower
Associative forecasting
Forecasting that considers a variety of variables to determine expected sales (uses simple and multiple regression)
Time series forecasting
Historical data can be used to predict future demands (Future is extension of the past)
Paved the way for standard container sizes
ISO 1987 (year 1970)
Lardner's Law
If we can cut our transportation cost in half the market area where goods can be offered will increase proportionally (4x b/c it is a circle)
Difference between int'l freight forwarder and NVOCC
NVOCC distinct responsibilities: -issue HBOL -set own rates for ocean and intermodal shipments -can enter into service contracts w/ ocean carriers to purchase trans services -acts as a carrier to a shipper, and a shipper to a carrier
Four Ps
Product, Price, Place, Promotion
Utilization rate
hrs actually worked / avail. hrs
Unit cost
Total labor, material, and overhead cost for one unit of production; price the customer pays to assume ownership 1. material 2. labor 3. overhead 4. packaging 5. transportation
Factory gate pricing
Transport costs are not included in the purchase price of a product
Destination Control Statement
Verifies the country to which goods are being shipped -required on invoice, BOL, AWB, and other export docs
Center of gravity coordinates
X or Y coordinate = (coordinate 1 x weight 1) + (coordinate 2 x weight 2) + etc / sum of all shipping weights
Production rate
[(end inv. - beg. inv.) + forecast] / # of periods
EOQ
[2 (annual usage)(setup costs)] / [(carrying costs)(unit cost)] 2AS/IC (SQUARE ROOT)
Break even point (solve for Q)
[make fixed cost + (make var. cost per unit x Q)] = [buy fixed cost + (buy var. cost x Q)]
Optimization model
a class of mathematical models used when the user seeks to optimize some objective function subject to some constraints; seeks to find the highest level possible for multiple variables at once
Free trade agreement
a pact between 2 or more countries or areas in which all participants agree to lift most or all tariffs, quotas, special fees, and taxes and other barriers to trade
Sales and Operating Planning (S&OP)
a process to develop tactical plans that provide mngmnt the ability to strategically direct its businesses to achieve competitive advantage on a continuous basis by integrating customer-focused marketing plans for new and existing products w/ the mngmnt of the supply chains
buffer
a quantity of materials awaiting further processing (raws, semifinished goods, or work backlog); purposefully held behind work center
efficiency rate
actual output / standard output
Container Security Initiative (CSI)
agreement that allows US customs agents in foreign posts to identify and inspect high-risk contains prior to their being loaded
Through BOL
allows a carrier to transport goods both domestically and across int'l borders; a shipment uses more than one mode (considered an inland BOL if all occurs domestically)
Contribution margin
amount equal to the difference between sales revenue and variable costs
jidoka
automation w/ human touch facilitated line stoppage and separation of operator and machine activities, mistake proofing, and visual control
Net Requirements
beg. inv. prior period + scheduled receipts - gross requirements
Goals achieved by eliminating waste (house of lean roof)
best quality, lowest cost, and shortest lead time
Master Bill of Lading
bill of lading issued by a carrier who are vessel owners
FAS (Free Alongside Ship) WATER
buyer lifts cargo onboard
EXW (Ex Works)
buyer takes over goods at seller's location and loads on collecting vehicle
Articulated trains
cars are joined permanently or semi-permanently for operation as a unit
ATR certificate
certificate required from trade between EU and Turkey grants zero duty to "free circulating" goods in the EU, which are goods originating in the EU or imported to the EU w/ all import duties and taxes paid
Collaborative Planning, Forecasting, and Replenishment (CPFR)
collab in 4 main areas: strategy & planning, demand & supply mngmnt, execution, and analysis
Logistics relationship spectrum
contract ongoing relationship leader/follower (integration begins in this stage) strategic alliance enterprise extension
cash-to-cash cycle time
days sales outstanding + inv. days of supply - days of payables outstanding
Draft
depth at which a ship sits in water
Flatrack containers
designed for heavy loads and cargo that needs to be loaded from the side or top
Harmonized Tariff Schedule (HTS)
determines the amount of tariff to pay; must classify goods moved across borders using the Harmonized System of the country of import (each country has own tariff schedule)
Echelon impact
each echelon adds operating expenses, holds inventory, adds to the cycle time, and expects to make a profit
Automated Export System (AES)
electronic reporting system for shipper's export declaration data that is sent to the Census Bureau
Goal of FTZ
encourage foreign investment and exports
Exempt carriers
exempt from regulation of services & rates if they transport certain exempt products like produce, livestock, coal, or newspapers
Shipper's Export Declaration (SED)
export/import doc prepared by the shipper and presented to a gov authority of the country in which the shipper resides before a shipment can be exported; specifies details on the goods to be shipped, including value, weight, and description (required for anything over $2500)
Types of utility
form (value added), place, time, possession
Relay terminal
freight is not touched
Bulk carriers (sea)
haul cargo w/ low value-to-weight ratio
Transaction Exposure
the extent to which the income from individual transactions is affected by fluctuations in foreign exchange values
Cost-volume analysis formula
total cost = fixed cost + (variable cost * volume) *solve for "volume"* -concept is operating leverage: high leverage means there is high fixed costs to overcome, but higher profits per sale will occur at the breakeven point; low leverage means there is high variable costs, which allows breakeven point to be reached easier, but incremental sales will produce less profit after b-even point
Cost-volume analysis
type of breakeven analysis that compares the fixed versus variable costs of various locations (assumes fixed costs are constant, variable costs are at a steady linear rate, and only one product is being shipped)
Duty Drawbacks
when a country grants a substantial tax break to exporters who use imported parts in the products they export -are not avail. for products exported to NAFTA countries
transfer pricing
when a subsidiary of a company sells product to another division located in a lower-tax country
Crossover point
x = (fixed cost 2 - fixed cost 1) / (var. cost 1 - var. cost 2)
Forecast error
| actual - forecast | / actual
