Chapter 2

Question 1

aims to treat the many different elements that come under the
broad category of distribution and logistics as one single
integrated system.

Answer 1

TOTAL LOGISTICS CONCEPTS (TLC)

Question 2

For example, delivery transport and storage, need to be considered within the context of the broader supply chain.

Thus the total system be considered and not just an individual element or subsystem in isolation.

Answer 2

TOTAL LOGISTICS CONCEPTS (TLC)

Question 3

A SIMPLE, PRACTICAL EXAMPLE HELPS TO
EMPHASIZE THE POINT:

A company produces __________ that are packaged in cardboard boxes.

These boxes are packed on to ______________ that are used as the basic unit load in the warehouse and in the transport vehicles for delivery to customers.

Answer 3

plastic toys
wooden pallets

Question 4

A SIMPLE, PRACTICAL EXAMPLE HELPS TO
EMPHASIZE THE POINT:

A study indicates that the _____________ is an unnecessary cost because it does not provide any significant additional protection to the quite robust plastic toys and it does not appear to offer any significant marketing advantage.

Answer 4

cardboard box

Question 5

A SIMPLE, PRACTICAL EXAMPLE HELPS TO
EMPHASIZE THE POINT:

Thus, the ____ is discarded, lowering the unit cost of the toy and so providing a potential advantage in the marketplace.

Answer 5

Box

Question 6

A SIMPLE, PRACTICAL EXAMPLE HELPS TO EMPHASIZE THE POINT:

One unforeseen result, however, is that the toys, without their boxes, cannot be stacked on to _________, because they are unstable, but must be stored and moved instead in special trays.

These ____ are totally different to the unit load that is currently used in the warehouse and on the vehicles (ie the wooden pallet).

The additional cost penalty in providing special trays and catering for another type of unit load for storage and delivery is a high one – much higher than the savings made on the product packaging.

Answer 6

wooden pallets
trays

Question 7

A SIMPLE, PRACTICAL EXAMPLE HELPS TO EMPHASIZE THE POINT:

The additional _________ in providing special trays and catering for another type of unit load for storage and delivery is a high one – much higher than the savings made on the product packaging.

Answer 7

cost penalty

Question 8

• is a situation that involves losing one quality or aspect of something in return for gaining another quality or aspect.

Answer 8

TRADE OFF

Question 9

FOUR DIFFERENT LEVELS OF TRADE-OFF:

Answer 9

1. Within distribution components
2. Between distribution components
3. Between company functions
4. Between the company and external organization

Question 10

those trade-offs that occur within single functions. ( e.g. warehousing)

Answer 10

Within distribution components –

Question 11

One example would be the decision to use random storage locations compared to fixed storage locations in a depot.

The first of these provides better storage utilization but is more difficult for picking; the second is easier for picking but does not provide such good storage utilization.

Answer 11

Within distribution components –

Question 12

those trade-offs between the different elements in distribution.

Answer 12

Between distribution components

Question 13

One example is the trade-off between optimizing production run lengths and the associated warehousing costs of storing the finished product.

example, a company might increase the strength and thus the cost of packaging but find greater savings through improvements in the warehousing and storage of the product (ie block stacking rather than a requirement for racking).

Answer 13

Between distribution components

Question 14

there are a number of areas of
interface between company functions where trade-offs can be made.

Answer 14

Between company functions

Question 15

One example is the trade-off between optimizing production run lengths and the associated warehousing costs of storing the finished product.

Long production runs produce lower unit costs (and thus more cost-effective production) but mean that more product must be stored for a longer period (which is less cost-effective for warehousing).

Answer 15

Between company functions

Question 16

– where a trade-off may be beneficial for two companies that are associated with each
other.

For example, a change from a manufacturer’s products being delivered direct to a retailer’s stores to delivery via the retailer’s distribution depot network might lead to a cheaper solution overall for the two companies

Answer 16

Between the company and external organization

Question 17

___________ should be undertaken according to a certain hierarchy
that reflects different planning time horizons.

Answer 17

Planning

Question 18

___________– a set of procedures for making decisions about the
organization’s long-term goals and strategies.

Answer 18

Strategic

Question 19

Involves making decision about the organization’s long-term
goals and strategies.

Answer 19

Strategic

Question 20

_________________ have a strong external orientation and cover major portions of the organization.

Answer 20

Strategic plans

Question 21

Medium to long-term horizon, 1to5 year (plus) time span, overall
‘structural’ decisions, trade-offs between company functions, trade-offs with other organizations, corporate financial plans and policies, policy decisions
developed into strategic plan.

Answer 21

Strategic

Question 22

a set of procedures for translating broad strategic goals and plans into specific goals and plans that are relevant to a distinct portion of the organization, such as a functional area like marketing.

Answer 22

Tactical

Question 23

focus on the major actions a unit must take to fulfil its part of the strategic plan.

Answer 23

Tactical plans

Question 24

Short to medium-term horizon, six-month to 1year (plus) time-
span, subsystem decisions are made – should not impose on other logistics components, Annual budgets provide finance/cost basis, corporate financial plans and policies, the strategic plan detail is made into an operational plan.

Answer 24

Tactical

Question 25

the process of identifying the specific procedures and processes required at lower levels of the organization.

Answer 25

Operational

Question 26

The planning model we have been describing is a hierarchical one, with top-level strategies flowing down through the levels of the organization into more specific goals and plans and an ever-more-limited timetable.

Answer 26

Operational

Question 27

day-to-day decision making, operations controlled against the standards and rules, control via weekly/monthly reports. The implementation of the operational plan.

Answer 27

Operational

Question 28

is about ensuring that the operation is set up to run properly

Answer 28

Planning

Question 29

– it is ‘doing the right thing’ or preparing for and planning the operation ‘effectively.

Answer 29

Planning

Question 30

is about managing the operation in the right way –

Answer 30

Control

Question 31

it is ‘doing the thing right’ or making sure that the operation is being run ‘efficiently’.

Answer 31

Control

Question 32

customer service, channel of distribution, supply points, production locations, location and size of depots, transport modal choice, third party or own account, direct delivery and stock level

Answer 32

Strategic

Question 33

vehicle types/sizes/numbers, contract hire, delivery schedule, design and layout, space allocation, handling methods, stock location and control, and documentation.

Answer 33

Tactical

Question 34

goods receipts and checking, bulk storage, order picking, stock replenishment, order marshalling, load scheduling, returns, and vehicle maintenance.

Answer 34

Operational

Question 35

– system-wide management of entire logistics chain as a single entity, instead of separate management of individual logistical functions.

Answer 35

Integrated logistic

Question 36

To support the need to develop more integrated operations there have been a number of developments in logistics and distribution systems that have the concept of total logistics as their basis.

Answer 36

INTEGRATED SYSTEMS OR INTEGRATED LOGISTICS

Question 37

First, realization of the importance, cost and complexity of logistics. Second, is the progress made in the field of information technology, which has enabled the development of sophisticated information systems to support and enhance the planning and management of logistics operations, whereby very detailed data collection and analysis can be undertaken that was previously impossible.

Answer 37

INTEGRATED SYSTEMS

Question 38

is a technique of allocating all of the appropriate costs and allowances to a given product.

Answer 38

Direct product profitability (DPP)

Question 39

_________ techniques can identify the costs of specific products to individual customers and so provide invaluable information for effective marketing strategies.

Answer 39

Direct product profitability (DPP)

Question 40

are systems have been developed as sophisticated, computerized planning tools that aim to make the necessary materials or inventory available when needed.

Answer 40

Materials requirements planning (MRP) and distribution requirements planning (DRP)

Question 41

is a system for calculating the materials and components needed to manufacture a product.

Answer 41

Material requirements planning (MRP)

Question 42

It consists of three primary steps: taking inventory of the materials and components on hand, identifying which additional ones are needed, and then scheduling their production or purchase.

Answer 42

Material requirements planning (MRP)

Question 43

is an integrated information system used by businesses.

Answer 43

Manufacturing resource planning( MRP II)

Question 44

It evolved from earlier ________________________ systems by including the integration of additional data, such as employee and financial needs.

Answer 44

Manufacturing Resource planning MRP II

Question 45

is a process of determining the right amount of manufactured goods to be shipped to each distribution center or warehouse in order to satisfy customer demand.

Answer 45

DRP- Distribution requirements planning

Question 46

originated as a new approach to manufacturing and has been successfully applied in many industries such as the automotive industry.

Answer 46

Just-in-time (JIT)

Question 47

The overall concept of _______ is to provide a production system that eliminates all activities that neither add value to the final product nor allow for the continuous flow of material – in simple terms, that eliminates the costly and wasteful elements within a production process.

Answer 47

Just-in-time (JIT)

Question 48

The objectives of JIT are vitally linked to distribution and logistics, including as they do:

Answer 48

- the production of goods the customer wants; - the production of gods when the customer wants them; - the production of perfect-quality goods; - eliminating waste (labor, inventory, movement, space, etc.)

Question 49

is the monitoring and optimization of the production and distribution of a company’s products and services.

Answer 49

Supply chain management (SCM)

Question 50

It seeks to improve and make all processes involved in turning raw materials and components into final products more efficient and getting them to the ultimate customer.

Answer 50

Supply chain management (SCM)

Question 51

Effective _______ can help streamline a company's activities to eliminate waste, maximize customer value, and gain a competitive advantage in the marketplace.

Answer 51

Supply chain management (SCM)

Question 52

5 Phases of Supply Chain Management (SCM)

Answer 52

1. Planning 2. Sourcing 3. Manufacturing 4. Delivery 5. Returns

Question 53

The supply chain is viewed as a ______ entity rather than a _______ of fragmented elements such as procurement, manufacturing, distribution, etc. This is also how logistics is viewed in most forward-looking companies. The real change is that both the suppliers and the end users are included in the planning process, thus going outside the boundaries of a single organization in an attempt to plan for the supply chain as a whole.

Answer 53

single--series

Question 54

Supply chain management is very much a ________________________, with a particular emphasis on strategic decision making rather than on the operational systems.

Answer 54

strategic planning process

Question 55

provides for a very different approach to dealing with inventory. Traditionally, inventory has been used as a safety valve between the separate components within the pipeline, thus leading to large and expensive stocks of products.

Answer 55

Supply chain management

Question 56

aims to alter this perspective so that inventory is used as a last resort to balance the integrated flow of product through the pipeline.

Answer 56

Supply chain management

Question 57

Central to the success of effective ________________________ is the use of integrated information systems that are part of the whole supply chain rather than merely acting in isolation for each of the separate components. These enable the visibility of product demand and stock levels through the full length of the pipeline. This has only become a possibility with the recent advances in information systems technology.