Supply Chain Logistics

Kadda Bertrand

Supply Chain Logistics

Professor Achia William

Writing Activity #1

9/9/16

1.10) The system approach shows that a company’s objectives can be realized by recognizing the mutual interdependence of the major areas of the firm, such as marketing, production, finance, and logistics. As such, decisions made by one functional areas can have important implications for the other functional areas. With respect to logistics, the system approach suggests that one should recognize the mutual interdependence of the various activities that constitute the logistics function. Thus, a transportation decision may impact inventory, warehousing, and packaging, among others.

1.11) Materials management refers to the movement and storage of material and components within a firm while physical distribution refers to the storage of finished product and movement to the customer.

1.15) The postponement is the delay of value-added activities such as assembly, production, and packaging until the last possible time. Production people favor long production runs of individual products because this allow the relevant fixed cost to be spread over more units, thus resulting in lower production cost per unit. Long production runs generate large amounts of inventory, and it’s often the logistician’s responsibility to store and track the inventory. Large inventories also lead to high holding cost. Car manufactures will not full assembly major car part until they are all located a one primary factory. This reduces shipping and holding cost form where parts are made until the reach main assembly plant.

1.16) Landed cost means the price of a product at the source plus transportation cost its destination. Landed cost is important for pricing decisions in two ways. The first one is offering customers free delivery of the product, because the transportation costs associated with delivery are captured in the landed cost. The second is a selling price that is based on a...