Taitt SCM

3PL Disadvatages

Control: A company will not have direct control over the logistics operation. Dependency: Outsourcing creates a dependency on the 3PL. Pricing: The company is locked into the pricing model specified in the contract

Technology and Trends in Transportation

Driver Monitoring Traffic Coordination Safety Technology Platooning New Concept Trucking Vertically Folding Shipping Containers Driverless Trucks Drone Delivery

Contract Warehouse Disadvantages

Duration: The client company is expected to enter into a contract for a specific period of time; generally three years.

Net-Rate Pricing

Established discounts and accessorial charges are rolled into one all-inclusive price. Pricing is tailored to the individual customer's needs

Global Location Decisions

involve location of the facility, defining its strategic role, and identifying the markets it serves Facility location must be part of the firm's supply chain strategy. Companies can locate anywhere in the world due to increased globalization, technology, transportation, and open markets. Location still matters . . . business/industry clusters illustrate that innovation and competition can be geographically concentrated.

Reverse Logistics (also known as Returns Management)

involves the process of moving a product from the point of customer receipt back to the point of origin to recapture value or ensure proper disposal. Backwards flow of goods from customers in the supply chain "Reverse logistics is all about damage control and making the process as customer-friendly as possible"

Currency Stability

Impacts business costs and consequently location decisions

Service Delivery System

Service delivery systems can be expressed as a continuum with mass produced, low-customer contact systems at one end and highly customized, high-customer-contact systems at the other end.

Products have little value to the customer until they are moved to the customer's point of consumption

Delivered at the right time. Delivered to the desired location.

Focus

Serve a narrow niche better than other firms. Examples: Grocery shopping for you, Mechanic specializing in Volvo or Porsche repair, Custom stereo in your house or car

Land Availability and Costs

As land and construction costs in big cities continue to escalate, the trend is to locate in the suburbs and rural areas

Managing Queue Times

Consists of the management of actual waiting time and perceived waiting time

4 Transportation Company Classifications

1. Contract Carriers 2. Private Carriers 3. Common Carriers 4. Exempt Carriers

12 Pillars of Competitiveness

1. Institutions 2. Infrastructure 3. Macroeconomic stability 4. Health and primary education 5. Higher education & training 6. Goods market efficiency 7. Labor market efficiency 8. Financial market sophistication 9. Technological readiness 10. Market size 11. Business sophistication 12. Innovation

3 Objectives of Transportation:

1. To maximize the value to the company through price negotiations 2. To make sure service is provided effectively 3. To satisfy customers' needs

Right-to-Work Laws

25 states have laws protecting the right of employees to decide whether or not to join or support a union.

Deemed Export

A Deemed Export is the release of technology or source code that is subject to the Export Administration Regulations, to a foreign national located in the United States.

Public Warehouse

A business that provides storage and related warehouse functions to companies on a short or long-term basis, generally from month-to-month. Own their own equipment and hire their own staff to manage the facility. Fees are typically a combination of a monthly storage fee plus a pallet-in fee and a pallet-out fee. Fees will vary based on what is being stored and/or based on: Size and weight of the pallets If they can be stacked How fragile the product is Value of goods (risk of theft) Hazards associated with the goods etc. They may also have some document fees and account management fees.

Offshore Factory

A factory set up for manufacturing or assembly in a country where labor and/or raw materials are less expensive, for eventual import back into the manufacturer's home country Manufactures products at low cost with minimal technical and managerial resources Take advantage of low labor costs Import or acquire parts locally, then export to the manufacturer or directly to customers Local management serves in a supervisory roll not in making management decisions. Example: Clothing produced in Bangladesh, Indonesia

Server Factory

A factory set up to take advantage of government incentives, reduce taxes/tariff barriers to meet regional needs Firm uses government incentives Low exchange risk and tariff barriers to reduce taxes and logistics costs. Makes minor improvements to product and processes Set up to serve the local market Example: Coca-Cola bottling. Mix the final ingredients to take advantage of exchange rates, tariff, taxes.

Private Warehouse

A storage facility that is owned by the company that owns the goods being stored in the facility. Generally established by companies that have a large volume or highly valuable goods, or the need for some type of specialized storage or handling. Can be operated as a separate division within a company Can be co-located on-site with manufacturing, or off-site.

International Trade Management (ITM)

A typical cross-border shipment involves: Accurately completing and filing about 35 documents. Compliance with over 600 laws and 500 trade agreements which are constantly changing. Interfacing with about 25 parties, including Customs, carriers, freight forwarders, other government agencies, etc.

Contract Warehouse

A variation of public warehousing that handles the shipping, receiving, and storage of goods on a contract basis The contract can be for an entire building, or for a defined portion within a building. Usually requires a client to commit to services for years rather than months The fee structure may be fixed cost, cost-plus, or a combination of both. The company providing the space handles the employees, equipment, and maintenance

Warehouse Network

A warehouse network is simply the number of, and the relationship between, the warehouses that a company has in their organizational structure. Trade-offs that will determine how many warehouses the company needs and where they should be located are; (1) the level of customer service the company wants to provide (2) the amount of inventory the company is willing to invest in

Franchising

Allows business to expand quickly in dispersed geographic markets Protects existing markets Builds market share and facilitates business when owners have limited financial resources.

Third Party Logistics (3PL)

An outsourced provider that manages all or a significant part of an organization's logistics requirements for a fee. Used for international logistics Favored by small businesses

Trade Compliance

Businesses violating trade regulations face fines of up to 40% of the value of the merchandise for "negligence," which can mean simply failing to keep certain necessary records.

Green Reverse Logistics Programs

Can have a positive impact on the environment though activities such as recycling, reusing materials and products, or refurbishing unused products. These programs can reduce environmental impact on landfills and deal with dangerous contaminants. Example: Unused pharmaceutical product returned to the pharmacy rather than "flushing it down the toilet" which ultimately causes the drug to end up in the water supply.

Level demand strategy

Capacity remains constant regardless of demand. When demand exceeds capacity, queue management tactics deal with excess customers

Chase demand strategy

Capacity varies with demand. So you can handle fluctuations but must take appropriate actions prior. Need to have options.

Market Positioned Strategy:

Close to customers to maximize distribution services and improve delivery.

Product Positioned Strategy

Close to supply source to collect goods and consolidate before shipping products out to customers.

Warehouse Network : Hybrid Approach

Companies may choose to do some type of a hybrid approach to balance costs and inventory against customer service. One hybrid network is a "hub-and-spoke" where there is a centralized warehouse (i.e., the "hub") which holds most of the inventory linked to a series of smaller geographically dispersed warehouses (i.e., the "spokes") which hold only a small amount of inventory to support their local area in the immediate time frame The hub warehouse feeds the spoke warehouses with inventory as necessary on a regular basis. Advantages: Operating costs are lower because the spoke warehouses are smaller than in a decentralized model. Inventory is also lower as all of the safety stock is held centrally, which generally means that less total safety stock is required because all of the risk and uncertainty is managed centrally. Customer service is generally better than in a purely centralized model since some of the inventory is maintained closer to the customer

The Weighted-Factor Rating Model

Compares the attractiveness of several locations along a number of quantitative and qualitative dimensions. Identify the factors Assign weights to each factor. The weights sum to 1. Determine a score for each factor. Multiply the factor score by the weight, then sum the weighted scores The location with the highest total weighted score is the recommended location.

Rail Carriers

Compete for transportation when the distance is long and the shipments are heavy or bulky. Rail is slow and inflexible Paired with trucks for door-to-door delivery Rail carriers have begun purchasing motor carriers and can now offer point-to-point pickup and delivery service. Rail companies use each other's rail cars. Keeping track of rail cars and getting them where needed can be problematic. Railroad infrastructure and aging equipment are also problems for the railroads.

Private Warehouse Advantages

Control: Offers greater flexibility in designing the warehouse and gives users significant control over operations. Visibility: inventory, material flow, handling, supervision, and associated costs. Cost: Operating cost can be 15% - 25% lower if the company achieves at least 75% utilization.

Transportation Pricing

Cost of Service Pricing Value of Service Pricing Combination Pricing Net-Rate Pricing

3PL Advantages

Cost: Eliminates the need for a company to invest in warehouse space, technology, and staff to execute the logistics process. Logistics Expertise: Knowledgeable of industry best practices and the latest developments in technology. Efficiency: 3PL's can leverage relationships and volume discounts, which result in lower overhead and the fastest possible service.

LEAN Warehousing

Cross Docking - A LEAN concept because it eliminates the need to store inventory, and reduces some transportation, which are both wastes. Reduced Lot Sizes and Shipping Quantities - By reducing lot sizes and shipping quantities, a company can increase velocity in the warehouse, and get shipments out faster. Faster throughput is a LEAN concept. Increased Automation - Companies are using automated systems like pick to light, voice picking, conveyor systems, automatized guided vehicles (AGV's), and robotics to improve efficiencies and throughput times in the warehouse. Green Warehousing - One of the more sustainable goals for a green warehouse is to make it a net zero energy user.

Air Carriers

Expensive relative to other modes of transportation Generally the fastest mode of transportation. Transport about 5% of U.S. freight. Cannot carry extremely heavy or bulky cargo. Mostly for light, high value goods over long distances quickly. Half of the goods transported by air are carried by freight-only airlines, e.g., FedEx. Paired with trucks for door-to-door delivery

Warehouse or Distribution Center

Facility designed to receive, breakdown, repackage, and distribute components to a manufacturing location, or finished products to a customer.

Outpost Factory

Factory set up in an area with an abundance of advance supplier, competitors, research facilities, etc. Setup in a location within proximity to: Advance suppliers. Competitors. Research facilities & Universities for materials, components and products

Contributor Factory

Focused on product development and engineering for products that they manufacturer Basically, a Server Factory which also includes: Product development. Production planning. Procurement decisions. Supplier development. Example: 1973 Sony built a Server factory in Wales and then 15 years later got involved in development, planning, etc. and now is a Contributor factory

Warehousing

Function that allows firms to store purchases, work-in-process (WIP), and finished goods and also perform break bulk and assembly activities while allowing faster and more frequent deliveries and better customer service

Business Clusters

Geographic concentrations of interconnected companies and institutions. Research parks and special economic / industrial zones serve as magnets for business clusters. Reasons for success: Close cooperation, coordination, and trust among clustered companies Fierce competition among rival companies Companies recruit from local skilled workers

Trade Compliance Systems (or Global Trade Management systems)

Have become a vital tool for every major importing and exporting company in the US. Really the only way to keep current with all of the continuously changing laws, regulations and procedures. Trade Compliance Systems can automate the process of checking every transaction For commercial and non-commercial products against every legal regulation before import or export.

Private Warehouse Disadvantages

High Start-up Cost: Capital to build or buy a warehouse. Long, risky investment. Cost of hiring and training employees. Purchase of material handling equipment. Fixed Location: Not easy to move to another location if the market changes. Fixed Size and Costs: When volume is low, the company still assumes the fixed costs.

Improving service productivity is challenging due to:

High labor content Individual customized services Difficulty of automating services Problem of assessing service quality

Service Response Logistics

How does supply chain management in the service industry differ from supply chain management in manufacturing? The tangibility of the end product The involvement of the customer in the service process The assessment of quality The labor content The facility location considerations

Return of Unsold Goods

In some industries, goods are distributed to downstream members in the supply chain with the understanding that the goods may be returned for credit if they are not sold e.g., newspapers, magazines, even pharmaceuticals. This acts as an incentive for downstream members to carry more stock, because the risk of obsolescence is borne by the upstream supply chain.

Problems include

Inability of information systems to handle returns Lack of worker training in reverse logistics procedures Little or no identification on returned packages Need for adequate inspection and testing of returns Danger of placing returned products back into sales stocks Can affect the entire supply chain financially Can have a large impact on how a consumer views a product or brand, potentially impacting future sales. Retail returns = 6% to 10% of sales

Trade Compliance Systems - Benefits

Increased level of compliance compared to a manual process. Decreased number of physical inspections by US Customs & Border Protection Faster release of shipments by US Customs & Border Protection. Avoidance of fines and penalties. Opportunity to interface with other systems.

Water Carriers

Inexpensive Very slow and inflexible Includes inland waterway, coastal and intercostal, and deep-sea cargo shipments. Primarily used for very heavy, very bulky, and very low-value materials (e.g., coal, grain). Paired with trucks for door-to-door delivery. Competes with rail and pipeline.

Waiting Time Management Techniques

Keep customers occupied Start the service quickly Relieve customer anxiety Keep customers informed Group customers together (they often talk to pass the time) Design a fair waiting system

Labor Issues

Labor availability, productivity, and skill. Unemployment / underemployment rates Wage rates; turnover rates; labor force competitors.

Global Services Issues

Labor, facilities, and infrastructure support vary by country Legal and political issues: Laws may restrict foreign competitors. Domestic competitors and the economic climate: Managers must be aware of local competition and their environment. Identifying global customers

Layout Strategies:

Layouts designed to reduce distance traveled within the store Departmental layouts to maximize closeness desirability

Pipeline Carriers

Lowest per unit cost for transportation Limited in the variety of commodities they can carry. Most reliable form of transportation Little maintenance needed once the pipeline is running. Materials are transported in a liquid or gaseous state.

F.O.B. Destination

Seller arranges for transportation and adds charges to the sales invoice. Seller assumes the risk for in-transit loss or damage. Title does not pass to the buyer until delivery is completed.

Source Factory

Manufactures products at low cost but with skilled workers and significant managerial resources an offshore factory that includes: Plant management involvement in supplier selection Plant management involvement in production planning More developed local infrastructure Access to skilled workforce Low production costs Example: Hewlett-Packard Singapore factory produced calculators and keyboards

pure strategy

Many retailers today sell products exclusively over the Internet

Warehouse Network Strategies

Market Positioned Strategy: Product Positioned Strategy Intermediately Positioned Strategy:

Intermediately Positioned Strategy:

Midway between supply source and customers, when distribution requirements are high and product comes from various locations

Motor Carriers (trucks):

Most flexible mode of transportation. Carries > 80% of U.S. Freight. Competes with Rail and Air for short-to-medium hauls. Short haul = 0 - 200 miles of the driver's home terminal Long haul = over 200 miles from the driver's home terminal

Logistics is necessary to:

Move goods and materials from suppliers to buyers Move goods and materials between sites (internal and external) Move finished goods to the customer

Public Warehouse Advantages

No capital investment or property taxes Flexibility: Can be short or long term contract For seasonal products Add storage capacity even on short notice Lower costs and reduced risk Access to special features and services: Temperature-controlled storage Customer Service, Inventory Ordering, etc. Office space for customer's sales, accounting, etc.

Regional Trade Agreements (RTA)

North American Free Trade Agreement (NAFTA): [1994] among the U.S., Canada, and Mexico

Rail and Water Carriers

Offer point-to-point pickup and delivery service known as Container-on-Flatcar (COFC)

Rail and Motor Carriers

Offer point-to-point pickup and delivery service known as Trailer-on-Flatcar (TOFC)

Pure Services

Offering few or no tangible products to customers

End Products

Offering tangible components

6 Global Location Types

Offshore Factory Source Factory Server Factory Contributor Factory Outpost Factory Lead Factory

International Expansion

Operate / partner with firms familiar with the region's markets, suppliers, infrastructure, government regulations, and customers Must address language and cultural barriers

Advantages of Cross Docking

Operational Efficiency: Warehouse operations are more efficient as the material does not have to be stored at the warehouse, moving directly from receiving to shipping. Inventory Efficiency: As there is no storage at the warehouses, total inventory in the supply chain can be reduced.

Shipping

Outgoing shipment of parts, components, and products. Includes packaging, marking, weighing, and loading for shipment.

Exempt Carriers

Person or company specializing in services or transporting commodities exempt from regulation by the Interstate Commerce Act.

Common Carriers

Person or company who transports freight for a fee that can be hired by anyone to transport goods.

Contract Carriers

Person or company who transports freight under contract to one or a limited number of shippers.

Receiving

Physical receipt of material, identification, inspection for conformance with the purchase order (quantity and damage), put-away, and preparation of receiving reports

Packing

Placing one or more items of an order into an appropriate container for safe shipping , and marking and labeling the container with customer shipping destination data, and other information that may be required.

Single Warehouse Network

Positives: Less complicated Operating costs and inventory will be lower No duplication of equipment, warehouse staff, and managers Network will be centralized and the company will have its best people, equipment and inventory systems concentrated in one place. Warehouse can more actively focus on the needs of its customers. Negatives: Centralized network may take longer to deliver product to some customers who are remote from the central location

Multiple Warehouses

Positives: Potentially faster delivery to customers from a decentralized network that is geographically dispersed throughout the market, assuming adequate inventory in each warehouse. Negatives: More complicated Operating costs and inventory will be higher as each warehouse costs money to staff and operate. Duplication of equipment, warehouse staff, and managers Network will be decentralized and the company will have to spread its best people, equipment and inventory systems across a larger network.

Public Warehouse Disadvantages

Potential for incompatible computer systems Specialized services may not be what is required/needed Space may not be available when/where needed

U.S. Department of Homeland Security (DHS)

Prevent terrorist attacks within the United States Reduce America's vulnerability to terrorism Minimize the damage from potential attacks and natural disasters The Department's first priority is to prevent the entry of terrorists and the instruments of terrorism, while simultaneously ensuring the efficient flow of lawful traffic and commerce.

Regulation -vs- Deregulation

Pro - Regulation tends to assure adequate transportation service throughout the country. Protects consumers from monopoly pricing, safety, and liability. Con - Regulation discourages competition and does not allow prices to adjust based on demand or by negotiation. U.S. transportation industry remains mostly deregulated

Reasons for Cross-Docking

Provide a central site for products to be sorted and combined for delivery to multiple destinations in the most productive and fastest method possible. Consolidate: Combine smaller product loads into one method of transport to save on transportation costs Break-Bulk: Break down large product loads into smaller loads for transportation for an easier delivery process to the customer.

Types of Warehouses

Public Warehouses Contract Warehouses Private Warehouses Consolidation Break-Bulk Cross-Docking

Other Functions of a Warehouse

Quality Inspections - incoming and outgoing. Repackaging - for specific customer orders. Assembly Operation - Warehouse operation that puts products together with other items/components before shipping them out to the final customer. Examples: Literature Spare Parts Advertising Materials

Most common forms of Intermodal Transport aka piggy back service

Rail and Motor Carriers Rail and Water Carriers Roll-on/Roll-off Ships

Primary Functions of a Warehouse

Receiving: Storage Picking Packing Shipping

F.O.B. Origin

Seller states price at point of origin and agrees to load a carrier Buyer selects the carrier and pays for the transportation Title passes to the buyer when the shipment originates. Buyer assumes the risk for in-transit loss or damage

Cost Leadership

Requires large capital investment in state-of-the art equipment and significant efforts to control and reduce costs. Examples: Auto diagnostics software, route planning to reduce windshield time, UPS optimization, etc.

First and Second Laws of Service

Rule 1: Satisfaction = perception - expectation Rule 2: It is hard to play catch-up

Service Capacity Planning Challenges

Service providers lack the ability to create a steady flow of demand to fully utilize capacity. Idle capacity is a reality for services Customer arrivals fluctuate and service demands also vary. Customers are participants in the service and the level of congestion impacts on perceived quality. Inability to control demand results in capacity measured in terms of inputs (e.g. number of hotel rooms rather than guest nights

Contract Warehouse Advantages

Services: client can obtain specialized services tailor-made to suit their needs. Cost: can be bundled in the contract and negotiated at a lower cost. Control: contract warehousing offers a degree of control at a reasonable price

4PL

Some firms outsource all of their logistics needs to various 3PL's and employ a lead logistics provider or fourth party logistics provider (4PL) to manage the activities of all the 3PL's

Lead Factory

Source of product and process innovation and competitive advantage across the entire organization (world-class) Source of innovation. Competitive advantage of the organization

Access to Suppliers and Cost

Supplier proximity influences the delivery of materials and effectiveness of the supply chain.

World Trade Organization (WTO)

The World Trade Organization is the successor to the General Agreement on Tariffs/Trade (GATT). WTO Functions include: Administering agreements Forum for trade negotiations Trade disputes Monitor trade policies Aid for Developing countries International organizations

Transportation

The function of planning, scheduling, and controlling activities related to the mode, vendor, and movement of inventories into and out of an organization. (Get the right product, to the right place, at the right time by ensuring the product is moved as efficiently as possible from point-of-origin to point-of-destination)

Cross-Docking

The logistics practice of unloading materials from an incoming truck or railcar and loading these materials directly onto outbound trucks or railcars, with little or no storage in between to reduce inventory investment and storage space requirements. .

The Primary Concern of Service Response Logistics

The primary concern of service response logistics is the management and coordination of the organization's service activities The four primary activities of Service Response Logistics: Service capacity Waiting times Distribution channels Service quality

Storage

The safe and secure retention of parts or products for future use or shipment.

State Utility

They do something to things owned by the customer

Differentiation

Unique service created based on customer input and feedback. Examples: Sunday car servicing at Hyundai, Ford, etc. Being different from another local dealer. This may be helpful in selling a car to someone who can't take off work on a Monday-thru-Friday when their car needs repair.

Break Even Model

Useful location analysis technique when fixed and variable costs can be determined Identify the locations to be considered. Determine the fixed cost of land, property taxes, insurance, equipment, and buildings. Determine the unit variable cost, materials, utilities, and transportation costs. Construct the total cost lines. Determine the break-even points on the graph. Identify the range over which each location has the lower cost.

Logistics Management Software Applications

Warehouse Management Systems (WMS) Track and control the flow of goods from receiving dock to outbound shipment. New technologies, such as RFID tags, facilitate tracking. Transportation Management Systems (TMS) Used to select the best mix of transportation services and pricing. Global Trade Management Systems (GTM) Provides global visibility, standardization, and documentation to comply with international trade regulations.

Break-Bulk

Warehouse operation that divides full truckloads of items from a single source or manufacturer into smaller, more appropriate quantities for use or further distribution. Located closer to the customer base so that the smaller LTL shipments travel the shorter distance, while the larger FTL shipments from the single source travel the longer distance before arriving at the break-bulk.

Consolidation

Warehouse operation that receives products from different plants or suppliers, sorts them, and then combines them with similar shipments from other plants or suppliers for further distribution. Located closer to the supply base so that smaller LTL shipments travel shorter distance and can be consolidated into larger FTL shipments traveling longer distance to the customer.

mixed strategy

While others use it as a supplemental distribution channel

Picking

Withdrawing components from stock to make assemblies or finished goods, or to ship to a customer.

Quality-of-Life Issues

You will need people to work at these locations - so consider the following Quality-of-Life issues in terms of maturity, sophistication, robustness, etc., in each location and do a comparison/evaluation Education Economy Natural Environment Social Environment Culture/recreation Healthcare Government/politics Mobility Public Safety

Services

cannot be inventoried (in most cases). Typically, services are produced and consumed simultaneously. are often unique to the customer have high customer interaction are decentralized due to the inability to inventory and transport most service products

Full-Truckload (FTL)

carriers are used when you have enough to fill the truck, or you don't want other suppliers cargo on your truck (security, faster delivery)

Less-Than-Truckload (LTL)

carriers move small shipments, when you don't have enough to fill a truck. Stop at depots and transfer locations to match load to the final location.

WATER

carries heavy, bulky, low value materials like coal, grain, and sand. Nonetheless, because transport by water is so cheap almost any item may be shipped by water including: automobiles, petroleum, containerized cargo, produce, etc.

AIR

carries items with a high cost to weight ratio. Very light, high-value goods that need to travel long distances quickly including jewelry, fine wines, pharmaceuticals, racehorses, etc

TRUCK

carries nearly anything from packaged household goods, to building materials, to liquid petroleum, etc.

RAIL

carries very heavy shipments including heavy building materials, construction equipment, coal, etc

General freight carriers

carry the majority of goods shipped. Includes common carriers.

U.S. Customs and Border Protection (CBP)

controls the import process It is the gateway agency for more than 20 other government agencies each of which has some control over various aspects of international trade. Its' mission is to safeguard America's borders thereby protecting the public from dangerous people and materials while enhancing the Nation's global economic competitiveness by enabling legitimate trade and travel.

Tariffs

federal taxes that are designed to protect local businesses. Countries with high tariffs discourage importing goods into the country and encourage multinational corporations to produce locally.

Private Carriers

person or company that transports its own cargo as a part of a business that produces, uses, sells or buys the cargo that is being hauled.

Combination Pricing

price is set at a value between cost-of-service minimum and value-of-service maximum. Most carriers use some form of combination pricing. Common in highly volatile markets and changing competitive situations

Value of Service Pricing

pricing strategy which sets prices based on the value perceived by the customer, i.e., "priced at what the market will bear".

Roll-On/Roll-Off Ship

specifically designed to allow trucks to be driven directly on and off the ship without the use of cranes. Provides flexibility and speed

Carrier

the company that transports the goods

Terms of Sale

the delivery and payment terms agreed between a buyer and a seller.

Service capacity

the number of customers per day the company's service system is designed to serve Hiring, training, supervising, and equipping personnel is costly (≈ 75% of operating costs) Therefore, service managers must forecast demand and provide capacity to meet the forecast demand

Logistics

the part of supply chain management that plans, implements, and controls the efficient, effective flow and storage of goods, services, and related information, from point of origin to point of consumption, in order to meet customer requirements

Cost of Service Pricing

the setting of a price for a service based on the costs incurred in providing it.

Mode

the way in which goods are transported

Specialized carriers

transport commodities like liquids, petroleum, household goods, building materials, and other types of specialized items

Foreign Trade Zones

where materials are imported duty-free as inputs to production