Exam 2-4
Logistical operations have two main flows: ______.
inventory and information
The Critical Fraction formula balances which two costs?
Cost of over stock (ordering too many) Cost of ordering too few (under stock)
Design-for-Six-Sigma programs offer a set of quality standards accepted by all industries.
False
Ordering cost only consists of the shipping cost from supplier to customer.
False
Scheduling major change-overs sequentially helps to shorten overall setup times for the factory.
False
The P-system of inventory submits inventory orders at random times.
False
The critical fraction formula output is the optimal quantity to order in a newsvendor model.
False
The modern concept of a distribution center means that products are never placed in storage
False
The standard deviation of demand during lead time is the same whether or not lead time is variable.
False
The time value of money, opportunity cost, is not part of the calculation of EOQ holding cost (T/F)
False
Trucking has superior operating characteristics in all categories except availability
False
Value Added Services (VAS) are seldom performed by Integrated Service Providers (ISP)
False
When the release of railroad equipment is detained by a shipper a detention charge may apply
False
Holding cost is which type of cost?
Fixed
Which of the following is not a characteristic of advanced planning and scheduling (APS)?
Forecasts are not necessary ARE CHARACTERISTICS: Constrained resource planning Integrated supply chain decision making Requires high data integrity and accuracy
Which of the following is not a benefit of CPFR? (Select all that apply)
Forecasts are used to guide the business practice Items from different suppliers are consistent BENEFIT: Coordinates manufacturer promotions with retailer promotions Coordinating items from different suppliers is a challenge with CPFR. For example, it is critical to accurately match dye lots for clothing even when the dyes come from different suppliers; however, through collaboration, this is an achievable goal.
Which of the following is a non-operating transportation intermediary:
Freight Forwarder
Which of the following is not a demand planning requirement?
Handle time fences Handling time fences is a supply planning requirement. Is a demand: Track promotion activity Provide reporting analysis and other metrics Allow exception alerts and resolution
When a firm engages in extended storage they normally are:
Holding inventory in excess of typical replenishment requirements
Facility network design is concerned with which of the following?
How many buildings. The location of the buildings. The ownership structure of the buildings. All of the answers
Since 1995 the use of intermodal transportation has:
Increase significantly
Which of the following material handling systems offers the most flexibility?
Information directed.
What are the three main challenges of the Q-system? (select three)
Inventory monitoring system Having enough when you order Figuring out how much to order
Total Quality Management (TQM)
Is managed proactively Focuses on the customer
What are the two main challenges of the P-system?
Length of review period Amount of inventory to have
S&OP is an integrated combination of three things. Which of the following is not included?
Logistical shortfall assessment Is included: Personal responsibility and accountability Information systems Organizational processes
Why is product quality sometimes poorly defined in a firm?
Managers are not clear on what characteristics customers care most about Holistic measures of quality are difficult to develop Managers in different functional areas tend to emphasize different dimensions of quality
Assembly is a primary service expected to be performed by lead suppliers.
True
Motor carriers are the most used mode of transportation
True
Pallets and slip-sheets basically perform the same functionality in a material handling system.
True
Railroad mileage has declined over the past several decades.
True
Safety stock is inventory held to guard against uncertainty
True
Evidence of the growth and influence of supply management in an organization includes:
involvement in strategic planning and executive status of the chief supply officer. Functions that are deemed critical to an organization typically have representation at the highest levels in the organization, have financial impact, broad span of control, and are involved in strategic decisions, such as mergers and acquisitions.
Reverse marketing:
is encouraged by the rapid rate of technological change, growth in international trade, and the need to extract competitive advantage from supply chains. There are at least three outside forces that suggest the increasing necessity for purchaser initiative in the creation of future sources of supply. These are: technological, growth in international trade, and competitive pressures. The increasing rate of development of new products, materials, and processes makes the industrial marketing task even more complex. The increase in international trade widens supplier horizons and may create a need for purchaser aggressiveness in the development of global sources of supply. Extracting competitive advantage from the supply chain requires purchasers to be more aggressive with suppliers and to develop sources to their expectations.
On average, the dollars spent with suppliers as a percent of revenues:
is greater in manufacturing organizations than in service organizations.
The optimization module of an advanced planning and scheduling (APS) system ______.
is the computational engine of the supply chain planning system
Make or buy and insourcing or outsourcing decisions are:
key strategic decisions. These decisions are largely driven by assessments of an organization's core competencies, which are those tasks or functions driving competitive advantage. As such, they are strategic in nature.
One of the most fundamental and critical decisions in any organization is, should we:
make or buy the needed good or service? One of the most critical decisions made in any organization is to make or buy. A series of make or buy decisions must be made when an organization is first started. As products and/or services are added or changed, make or buy decisions continue to be made. Over time as circumstances change, some of these decisions are reversed, which is referred to as insourcing and outsourcing.
A supplier's references:
may be useful if they are of similar size and objectives as the buyer's organization. A buyer can increase the chance of getting useful information from a reference by specifying that the reference must be of similar size and objectives as the buyer because the issues, concerns, opportunities and challenges will be similar.
Decision trees:
may be useful in making effective supplier selection decisions if probabilities of success and failure are assessed for each option. In a decision tree, each branch represents an option (e.g., supplier A or Supplier B) and each leaf represents a decision (e.g., satisfactory performance or unsatisfactory performance). The decision maker evaluates all available data and information to assign a probability of each (p, and 1-p) to guide the supplier selection. See Figures 12-1 and 12-2.
Outsourcing:
may reduce operating costs, improve focus on core competencies, and gain access to world-class capabilities.
Good reasons to reduce your setup times in a factory are: (Choose all that apply)
A down machine has no output Long setup times create additional inventory
A zero defects quality strategy emphasizes:
"do it right the first time." To attain zero defects, the output (goods or services) must be made/delivered correctly the first time. Defects will show up somewhere along the supply chain, for example, in increased levels of safety stock raw material, work-in-process, or finished goods inventory. For a service, defects may lead to a service being provided a second time if possible, a lost sale, or worse a lost customer.
Three major challenges facing supply executives when setting supply strategies and objectives are:
(1) What is the effective interpretation of corporate objectives and supply objectives? (2) What is the appropriate action plan or strategy to achieve the desired objectives? and, (3) How can supply issues be identified and integrated into organizational objectives and strategies? While all these questions eventually must be answered in a well-run supply organization, the questions most relevant to strategy development - long-term planning, are those linking organizational strategy to supply strategy.
In manufacturing organizations, the dollars spent with suppliers fall into what range as a percent of revenues?
50 to 80 Empirical data indicate that manufacturing organizations spend 50-80 percent of revenues with suppliers while service organizations spend only 25-35 percent. This makes sense because manufacturers must buy inputs to transform into tangible outputs, and many manufacturers are highly capital-intensive and less labor-intensive. Service organizations spend less as a percent of revenue because they are more labor intensive and therefore spend more on labor (employees).
In 2016 US business logistics costs represented what portion of Gross Domestic Product (GDP)?
7.5%
For an organization with revenue of $100 million, purchases of $60 million, and profit of $8 million before tax, a 10 percent reduction in purchase spend would result in an increase in profit of:
75 percent. If spend ($60 million) is reduced by 10 percent ($6M) then profit increases from $8 million to $14 million, with all else being equal. The $6 million increase in profit is a 75 percent increase (6/8 = 75 percent).
Among the following choices which is typically the most expensive transportation mode:
Air NOT: Water Truck Rail
Which phrase/word best captures what lean is?
A corporate philosophy The lean systems approach is a philosophy of operations management used in various activities of the enterprise.
Advanced planning and scheduling (APS)
Advanced planning and scheduling (APS) is a type of system that tracks costs based on the activities that are responsible for driving costs in the production of manufactured goods. An APS allocates raw materials and production capacity optimally to balance demand and plant capacity.
Which of the following is not a purpose of APS planning charts?
Aid employees in understanding production purposes Is a purpose: Facilitate decision making for optimal results Assist planners with evaluating cost procurement identify various stages within the supply chain
Which of the following must a firm consider before APS implementation? (Select all that apply)
Benefits Applications Characteristics
Which of the following lean principles best communicates the notion of demand synchronization?
Build only as quickly as customers want them "Build only as quickly as customers want them" articulates the notion of demand synchronization.
CPFR
Collaborative Planning, Forecasting and Replenishment (CPFR), a trademark of GS1 US, is a concept that aims to enhance supply chain integration by supporting and assisting joint practices. CPFR seeks cooperative management of inventory through joint visibility and replenishment of products throughout the supply chain.
The four economic benefits of warehousing are:
Consolidation, sorting, seasonal storage, and reverse logistics
What is another name for the "Q-system" of inventory?
Continuous Review Inventory System
Supply chain synchronization attempts to achieve which of the following?
Coordinate multiple firms activities across the supply chain.
The newsvendor model balances which two costs (choose all that apply)?
Cost of ordering too many Running out and losing profits
If a transportation vehicle has completed a delivery and is returned empty, the situation is called a:
Deadhead
Which two things drive the need for safety stock? (choose two)?
Demand Variability Delays
The critical fraction gives us a probability because:
Demand is unknown
When lead time and demand are both variable, the formula we use consists of which two parts? (select two)
Demand variability Lead time variability
Lean design strives to achieve which of the following objectives?
Design products that exactly meet customers' needs One of lean design's three major goals is to design products that exactly meet the customer's needs.
Which of the following is not a practical element that influences forecasting?
Discontinued products ARE PRACTICAL ELEMENTS: Promotions Competitive actions Financial Requirements The practical elements that influence forecasting include promotions, price changes, financial requirements, product substitution, new product introductions, and competitive actions. These key components contribute about 70% of the variation that impacts the forecasting process.
Declining transport rates as the quantity shipped increases represents:
Economy of Scale
What helps a person most with their forecasting abilities?
Experience
Which of these is a cost of quality?
External failure cost prevention cost inspection cost NOT: Design cost
A Push system requires a high degree of coordination between production stations.
False
A slot is the location where an over-the-road truck is parked.
False
An offered discount makes no change to determining optimal order quantity
False
Lean systems applications have found the most acceptance and adoption in:
Manufacturing firms While lean systems have been employed in all of these environments, most application has occurred in manufacturing.
Persons with responsibilities in which business function will make decisions regarding new product testing programs?
Marketing Marketing management make decisions regarding how new products and new product ideas will be tested.
Which of the following would be considered part of Ordering Cost? (choose all that apply)
Minimum shipping charge Renting a truck to haul the order (and only this order, no other business is used for this truck's one time retail)
When a firm uses cross-docking, inventory:
Moves directly from receiving to shipping
Which of the following is a/are reason(s) that APS emerged? (Select all that apply)
Need for inventory management Advances in networking capabilities Declining costs of computers
The basic calculation in the newsvendor model will result in a calculation of:
Optimal probability of running out
If I calculate the EOQ with the new, discounted material cost and the resulting quantity is enough to get the discount, what should I do?
Order the discounted EOQ amount
What is another name for the "P-system" of inventory?
Periodic Review Inventory System
When a firm "spot stocks" inventory they are engaged in:
Placing inventory in a local warehouse in anticipation of future need
In the end, the point of using the EOQ formula is to:
Point us toward the possible lowest cost option
Kaizen events are most effective when applied to problems involving which of the following elements?
Processes A Kaizen event is a short-term project aimed at improving an existing process or an activity within a process.
"Slotting" a warehouse means:
Products are assigned a specific warehouse location
Which of the following statements is true of Push and Pull systems?
Push and Pul systems are opposite but can still be used together
Which of the following would be considered a direct holding cost? (choose all that apply)
Refrigeration costs Weekly inventory quality checks for every unit in inventory
All of the following represent external failure cost EXCEPT the cost of:
Repairing items covered by warranty Replacing defective items found by customers Loss of goodwill and reputation NOT: Scrapping defective raw material Scrapping raw material is an internal failure cost. The others are external failure costs.
What is the great benefit of the Q-system?
Responsiveness
Direct logistics operating arrangement accomplish which of the following?
Ship products direct to the consumers destination from one or more locations.
What is the great benefit of the P-system?
Simplicity in managing the system
Which of these is a concept for reducing setup times?
Single minute exchange of die
Finding average demand during lead time involves doing which of the following?
Summing the daily average demand per day
__________ involves ensuring that the enterprise is prepared to meet the forecasted demand by generating a constrained, optimal plan using response buffers of inventory and capacity.
Supply planning
Which of the following is the rationale for plastic packaging?
Sustainability Protection from dropping Lower transportation cost All of the choices are correct
The use of a Warehouse Management System(WMS) to route fork trucks on-demand is called:
Task Interleaving
As lean systems thinking is implemented, the amount of training that employees receive:
Tends to increase Lean systems rely on well-trained workers for implementation. Employees must be given the training, tools, and authority to make continuous process improvements.
The document that lists and details the contents and conditions of a shipment is called:
The Bill of Lading
Inspection Cost
The cost associated with inspecting a product to ensure it meets the internal or external customer's needs and requirements; an appraisal cost.
Which of the following statements is true when comparing the total cost curve for a product without discounting and the total cost curve with discounting?
The discounted curve is always below the undiscounted curve but does not really exist for values less than the minimum order amount to receive the discount.
The "right" amount of safety stock is often a function of Service Level. Service Level is:
The probability of meeting demand during a delay
The mode of transportation hauling the most tonnage is:
Truck
A Pull system is likely to struggle to meet demand during demand spikes.
True
The Q-system of inventory submits inventory orders at random times.
True
The newsvendor model works well for perishable products
True
Echelon logistics operating arrangements accomplish which of the following?
Utilize warehouses to create inventory assortments and achieve consolidation economies.
Ordering cost is which type of cost?
Variable
Since standard deviations don't sum, we have to sum which thing instead?
Variance
Which one of these concepts is not part of logistical integration objectives?
Variance reduction Inventory reduction Responsiveness NOT: Using less parcel shipping.
Which of the following is an important belief found in lean cultures?
Waste is a symptom As discussed in the section dealing with lean culture, the only belief that is central to the lean culture is the notion that waste is a symptom. Consequently, it should not be attacked directly. Rather, it should be studied to identify the underlying root causes, and management should then attack these root causes.
Generally the least costly method of moving product that is not gaseous, liquid, or slurry is:
Water
When engaged in warehouse picking and a combination of customer order requirements are selected simultaneously the method being employed is called:
Wave selection
External Failure Cost
a cost related to all errors not detected and corrected before delivery to the customer
The decision to make or buy a good or service is:
a decision of strategic importance that deserves careful evaluation.
Outsourcing is:
a high risk venture because the costs of reversing the decision are often high. Outsourcing is a high risk venture because the internal talent, processes, and equipment are lost, and may be difficult and costly to recapture.
Subcontracting refers to the practice of:
a prime contractor bidding out part of a job to another contractor. Subcontracts can exist only when there are prime contractors who bid out part of the work to other contractors, hence the term subcontractor.
Total Cost Logistics Model takes into consideration ______.
all expenditures necessary to perform logistical requirements
A strategy is:
an action plan to achieve specific long-term goals and objectives. By definition, a strategy is focused on the longer-term and how (the action plan) goals and objectives might be met.
Reverse marketing is:
an aggressive, purchaser-initiated approach to finding and developing world class suppliers.
Linking current and future needs with current and future markets is the primary focus of:
an effective supply strategy.
A request for quotation (RFQ):
asks the supplier to declare at what price and what terms they are prepared to supply.
Supply strategies that are based on changes in demand and supply are known as:
assurance-of-supply strategies. Assurance-of-supply strategies are designed to ensure that future supply needs are met. Therefore, it is critical that supply understand current and future demand for each requirement and current and future availability of supply.
In the portfolio matrix, characteristics of goods and services in the leverage quadrant are:
competitive supply market, substitution is possible, price per unit is important. In the leverage quadrant, there are multiple suppliers and market forces keep prices competitive. Items are fairly standard, quality is comparable and substitutes are available. Therefore, convenience, ease of acquisition, low acquisition costs, and delivery systems may be the most important decision criteria. As the required volume of standard items increases, leverage opportunities increase and price per unit becomes a critical variable. Volume gives the buying organization more power in the marketplace, and the supply manager focuses on developing strategies to leverage volume and scale.
Supply strategies that are designed to exploit market opportunities and organizational strengths to give the buying organization an advantage in the marketplace are known as:
competitive-edge strategies.
The three factors fundamental to transportation performance are ______.
cost, speed, and consistency
Prevention Costs
costs associated with preventing defects before they happen
Internal Failure Cost
costs resulting from defects that are discovered during the production of a service or product
The resource management module of an advanced planning and scheduling (APS) system ______.
defines and coordinates supply chain system resources and constraints
Interest in the supply function as a managerial activity began:
during World Wars I and II because of global materials shortages. The function was recognized as an independent and important function by many of the nation's railroad organizations well before 1900, but it was not until the materials shortages of WWI and WWII that supply was recognized as a managerial activity.
Supply strategies that are designed to anticipate and recognize shifts in the economy, organization, people, legal, government regulations and controls, and technologies are:
environmental change strategies. All the areas listed in the question are part of the competitive environment in which an organization functions.
Supply management's role in environmental sustainability is:
expanding because suppliers can influence the ability to achieve the goal of zero environmental impact. Supply managers play a key role in an organization's sustainability initiatives in product or service design, sourcing and contracting, and asset or investment recovery. Environmental sustainability supply chain strategies range from merely trying to avoid violations to including environmental considerations from the design stage forward. In many organizations, supply plays an important role as an information link between environmentally affected individuals, internal functions, and suppliers in the handling of waste and hazardous materials.
The more significant the service ______ impact upon a customer's business, the greater the priority placed on error free logistical performance.
failure
Supply can influence risk management in which area(s)?
financial, operational and reputation The supply function impacts the organization in terms of operational, financial and reputational risks. Financial risks are the most evident, such as the costs of purchased materials and services. Operational risks include supply disruptions. Reputational risks include inappropriate conduct of suppliers.
To avoid risk, a buyer can:
hedge in a commodities market, require bid or performance bonds and decide not to do business in certain countries. There are various risk avoidance strategies including hedging (taking an offsetting position in a related security, such as a futures contract), requiring bid or performance bonds to protect the buying organization in the event a supplier fails to perform, and avoiding doing business in certain high risk countries.
When a supply-related risk exists, the supply management team should:
identify and classify risks, assess possible impact, develop a mitigation strategy, inform the chief supply officer, await instructions, and implement the directive. Part of supply's strategic contribution includes its proactive role in risk management, which includes identifying and classifying risks, assessing potential impact, and developing a mitigation strategy. If supply were purely operational, then it would take a reactive role and follow the directives from others in the organization.
Subcontracts can only occur:
if there is a prime contractor bidding out part of a job.
Assessment of a potential supplier's financial situation:
may yield substantial opportunities for negotiating favorable terms for both buying and selling organizations. There are often substantial opportunities for negotiation if the purchaser is fully familiar with the financial status of a supplier. For example, the offer of advance payment or cash discounts may be highly attractive to a firm short of working capital. A supplier with substantial inventories may be able to offer supply assurance and a degree of price protection at times of shortages.
Small suppliers:
often provide the greatest responsiveness and flexibility. Generally, small suppliers tend to have greater responsiveness and flexibility because of shorter reporting lines and therefore, faster decision-making. In many small companies, the owner makes all key decisions.
Evaluation of the supply function's contribution to organizational goals and strategies can be viewed in the context of:
operational and strategic direct and indirect both a and c above.
When a team decides that a task or function currently performed by company employees is a noncore competency, the team is likely to recommend:
outsourcing Noncore competencies are not critical to an organization's ability to outperform the competition or be successful. Noncore activities must be performed, but these activities are the target of outsourcing because it is believed that suppliers will be better able to perform them and at lower cost.
The supply area is a good training ground for managers because it provides exposure to:
pressure of decision making under uncertainty and various levels and functions in the organization. Many organizations include supply as part of their rotation system for high-potential employees. It exposes the employees to different parts of the organization, such as operation and engineering, as they address supply requirements. The day-to-day decisions can have a significant impact on the organization and allows for evaluation of individual judgement and willingness to assume responsibility.
A successful supply chain management strategy integrates:
processes and systems within and across organizations. The "chain" piece of supply chain management symbolizes the linkages between and among organizations. While internal integration is essential, an organization has not really embarked on supply chain management until it has expanded integration beyond the walls of its own organization.
Supply has the potential to contribute to:
profitability, competitive position and sustainability performance. Supply can potentially contribute directly to the company's financial performance through cost of purchased products and service and investments in inventory. The environmental footprint of any organization is affected by the environmental practices of suppliers. Superior supply capabilities and performance can be a source of competitive advantage.
Supply managers believe they can add the most value to the outsourcing decision by:
providing a comprehensive, competitive process.
The traditional supplier evaluation criteria are:
quality, quantity, delivery, price and service.
Outsourcing of services is:
realistic if service requirements and quality expectations can be clearly defined. The volume of services being outsourced is increasing and the scope (types of services) is also increasing even though it is difficult to define service requirements and quality expectations, and measure them. If internal users and supply managers clearly define requirements and expectations, successful services outsourcing is possible.
In the outsourcing decisions in many organizations, supply has had:
relatively moderate involvement. Research indicates that supply has had relatively moderate involvement in the outsourcing decisions in many organizations.
The impact of supply management actions on the balance sheet is measured by the:
return on assets effect.
SA8000 certification is for:
social sustainability.
The question: "How can supply and the supply chain contribute effectively to organizational objectives and strategy?" is a key question in:
strategic supply management. This question is the starting point for the development of an effective supply strategy. Supplier relationship management, strategic sourcing and supplier network management are activities within strategic supply management; these actions are means and the end is effectively contributing to organizational objectives and strategy.
The design and management of seamless, value-added processes across organizational boundaries to meet the needs of the end customer is called:
supply chain management. The components of the supply chain include downstream entities -- the organization's customers and their customers -- and upstream entities - suppliers and suppliers' suppliers. The focus is on minimizing costs and lead times across tiers in the supply chain to the benefit of the final customer.
Strategies designed to make available the knowledge and capabilities of supply chain members to others in the buying organization are called:
supply-chain-support strategies.
The goal of logistics is to ______.
support procurement, manufacturing, and customer accommodation
Normally, most organizational objectives can be summarized as:
survival, growth, financial, and sustainability. First, management must develop objectives that will ensure organizational survival, then the focus can shift to growth objectives including growth, financial targets and sustainability objectives.
When developing strategies related to "how to buy," decisions must be made about
systems and processes. Deciding how to do something means developing a process. Once defined, systems and procedures are developed to enable an efficient and effective process. The other answers are part of a supply strategy, but do not relate directly to "how to buy."
The document that lists and details the contents and conditions of a shipment is called ______.
the bill of lading
Sustainability is:
the combination of environmental and social performance. The concept of the triple bottom line (TBL) balances financial, environmental, and social performance of the organization, otherwise referred to as the 3 Ps—profit, planet, and people. Sustainability represents the planet (environmental) and people (social) aspects of the TBL.
The consignee is ______.
the customer receiving the product
Noncore competencies of an organization are typically:
the first things to be outsourced to access supplier expertise. Core competencies are typically performed in-house because of their strategic value. Noncore competencies are typically the target of outsourcing.
The return on assets effect (ROA) quantifies and measures:
the impact of supply actions on inventory and the balance sheet. Assets include goods held in inventory. The return on assets is a measure of the impact on the organization's balance sheet of a reduction, or an increase, in money tied up in these assets.
Performance cycle uncertainty has the following trait: ______.
the larger the variance to desired goal, the bigger the impact
The use of the concepts of purchasing, procurement, supply, and supply chain management will vary from organization to organization depending on:
the organization's stage of development and/or sophistication, the industry in which they operate and the organization's competitive position. As with other areas of management, the degree and speed in which companies adopt leading supply practices varies.The level of sophistication may vary by industry because of the perceived relative importance of purchasing to organization success. Less sophisticated organizations frequently under appreciate the potential of supply and do not invest in resources to develop capabilities in this area. Competitive pressures force organizations to adopt best practices and take innovative approaches.
Logistics is ______.
the process that links supply chain participants into integrated operations the catalyst of activity between different supply chain functional areas such as procurement and warehousing a critical component to supply chain success an amazing career to pursue All of the answers
Privatization is:
the term for outsourcing used in the public sector. In the public (government) sector, a decision to buy something that was made previously by government employees is referred to as privatization rather than outsourcing. This reflects the fact that the task or function will be performed by private sector organizations and employees rather than public sector (government) employees.
Which of the following statements supports single sourcing:
the use of just-in-time production, stockless buying, or systems contracting. Single sourcing is used typically when quality and quantity are absolutely essential to the buying organization's processes. This is true in JIT when inventories are lean and the supplier makes frequent deliveries; and in stockless buying and systems contracting when the supplier is managing inventories.
If you want the consignee to be responsible for goods while they are in-transit you should ship products ______.
to FOB origin
The logistics activities most frequently outsourced are:
transactional, operational and repetitive. According to Capgemini's Annual Third Party Logistics study, transactional, operational, and repetitive activities such as transportation, warehousing, and freight forwarding are most frequently outsourced.
The work of logistics involves ______.
transportation, inventory, order processing, warehousing, and facility network design
Company image may be directly influenced by:
treating suppliers in a fair and equitable manner, complying with regulatory requirements and sustainability practices of suppliers. How suppliers are treated will spread throughout the supply community; non-compliance with regulations may lead to negative publicity or fines; and poor supplier sustainability practices will reflect poorly, and may have legal implications, for the buying organization. One example is the collapse of the Rana Plaza in Bangladeshi in 2013, killing more than 1,100 people, which affected brands such as Walmart, Benetton and Loblaw.
When developing supply strategies, the supply manager must determine:
what to make or buy, when to buy, how much to buy and how it should be ordered. All these questions must be answered as part of strategy development. The key considerations are: (1) Should we make it or pay someone else to make it? (2) Should we buy now (forward buy) or wait? (3) What quantities should we order? and (4) How should we order - e.g., what process (e-commerce or competitive bids?)