marketing ch 9
Days of supply
- an estimate of how many days the firms current inventory will last; calculated by dividing the inventory on hand by the average daily usage or sales
Inventory carrying cost
- the costs required to make or buy a product, including risk of obsolescence, taxes, insurance, and warehousing space used to store the goods
Types of inventory
1. Cyclical inventory 2. Pipeline inventory 3. Anticipative stock 4. Seasonal stock 5. Obsolete inventory
Supply chain strategy
1. Push strategy 2. Pull strategy 3. Push pull strategy
Transportation Modes
1. Railroads 2. Trucks 3. Air transportation 4. Water transportation 5. Pipelines 6. Cyberspace
Warehouse functions
1. Storage 2. Movement 3. Production
Product allocation
Product allocation
Purchase order
a legal obligation to buy a certain amount of product at a certain price from a supplier to be delivered at a specified date
Just In time(JIT)
a manufacturing process that seeks to make products based on customer orders rather than in anticipation of orders and to receive components form suppliers only when they are needed for production
Supply chain
a set of three or more companies directly linked by one or more of the upstream and downstream flows of products services, finances, and information from a source to a customer
Stockout
a situation in which a company does not have enough inventory available to fill an order
Core carrier
a strategy in which a firm selects a small number of carriers as opposed to using a large number of different carriers
Push strategy
a supply chain strategy in which a company builds goods based on a sales forecast, puts those goods into storage, and waits for a customer to order the product
Pull strategy
a supply chain strategy in which customer orders drive manufacturing and distribution operations
Push pull strategy
a supply chain strategy in which the initial stages of the supply chain operate on push system, but completion of the product is based on a pull system
Distribution center(DC)-
a type of warehouse used specifically to store and ship finished goods to customers
Enterprise resource planning(ERP) system
data management systems that integrate information across all the departments of all organization
Contract carriers
for-hire truck companies that move goods exclusively for certain customers
Common carriers
for-hire truck companies that sell their services to any business
Product sortation
gathering goods with similar characteristics in one area of distribution center to facilitate proper inventory controls and effectively provide customer services
Distribution channel
intermediaries-wholesalers, distributors, and retailers- through which the flow of products travel.
1. Cyclical inventory
inventory a firm needs to meet average demand
5. Obsolete inventory
inventory that can no longer be sold because the product has expired, been redesigned, was over ordered, or is at the end of its product life
2. Pipeline inventory
inventory that is in transit between suppliers and customer
3. Anticipative stock
inventory that is produced or purchased when a company expects something to occur in the future that will negatively affect stock available
Product assortment
mixing goods coming from multiple suppliers into outgoing orders so that each order includes a variety of goods rather than just one type of good
Reciprocity
purchasing goods and services form suppliers only if they buy from the purchasing manager's company
Product allocation
receiving goods from various suppliers, storing the goods until they are ordered by a customer or other company-owned facility, and consolidating orders to achieve transportation economies of scale
Supply chain management
the actions the firm takes to coordinate the various flows within a supply chain
4. Seasonal stock
the goods a firm sells only at certain times of the year
Inventory turn
the number of times a firms entire inventory is sold and replaced; calculated by dividing the cost of goods sold by the company's average inventory
Logistics
the part of supply chain management the plans, implements, and controls the flow of goods, services, and information between the point of origin and the final customer
Intermodal transportation
using several types of transportation for the same shipment
Personal buying
when a purchasing manager buys items for the personal use of employees rather than for business use
