SCHM 2301 Chapter Notes - Chapter 11: Outsourcing, Break Bulk Cargo, Reverse Logistics
22 Mar 2016
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Document Summary
The role of logistics in supply chain management. Logistics management the part of supply chain management that plans, implements, and controls the efficient effective forward and reverse flow and storage of good, services and related information between the point of origin and the point of consumption. In short, it is concerned with moving and storing materials at lowest cost while still meeting customer requirements: primary activities. Failure for a suppler to provide a material on time could result in plant shutdown. Logistics play a critical role in ensuring: availability, lead-time performance, service reliability (cid:1) (cid:1) (cid:1) Providing higher levels of service result in higher costs, logistics managers are faced with trade-offs. Cost-to-service trade-off as service levels increase typically so do costs: improved lead time = more expensive transportation, better availability = carrying more inventory. Cost-to-cost trade off occurs when increasing the cost of one logistics activity reduces the cost of another activity: more warehouse locations lower transport costs (cid:1)
