Lecture Summary Flashcards
Preparation for the exam (41 cards)
When to choose private vs public warehouse?
Private:
- Stable demand
- Dense market area
- Control
Public
- Requirement for no or limited capital
- Flexibility
- Space need for shorter or longer periods
- Location flexibility (immediately expand to new market areas without fixed costs)
- Third party operators may provide distribution management services
Purpose of supply chain execution systems?
Manage inventory, space, material handling equipment, labor and transportation resources
in real time
to assure timely, error-free fulfillment, delivery, and visibility of order status
throughout the supply chain.
It matches information and material flow.
Purpose of Warehouse Management System?
Manages warehouse inventory, space, equipment, and labor resources to direct the flow of materials and information from receiving and putaway to light assembly, order picking, value added processing and shipment. WMS functions consists of receiving, putaway and picking & shipping.
Mobility as a service? Why?
Possibility to buy different types of transportation with single price. Possible to tailor it for different needs and you only pay for what you use.
Advantages in a nutshell:
- More time
- Less pollution
- More room for life
- Less trouble (insurance, repairment)
- More freedom
- High quality commuting
- Less unnecessary traveling
What is Finnish transport agency and what are its duties?
Agency in ministry of transport and communications. The Finnish Transport Agency’s domain comprises the entire transport system and all modes of transport, except for aviation. The Agency’s duty is to ensure that Finland has an effective, safe, energy-efficient and environmentally friendly transport system.
What is the benefits from a web service (SOAP XML) based system integration compared to the traditional one used between Finnlines and its customers?
- No delays
- Full control
- Transparency
- ShapeEasy to Use
Describe WTO/WCO and its key functions (14-15, 16-17 slides)
WTO (98% of trade) sets global rules of trade, handles negotiations to reduce obstacles of international trade, handles dispute settlements to secure members’ rights
WCO (world customs org) stimulates legitimate growth and enhances protection. Simplify and harmonize customs, tariffs.
Main challenges of customs and tools used to tackle these?
- Smooth flow of trade
- Necessary controls
- Guarantee safety and security for community
Tools:
- Modern customs procedures ), E-communication (paperless)
- Control methods
- Union Customs Code
- EU-Wide IT systems
Global agreements (WTO), regional arrangements (EU), geographically homo., regional alliances, bilateral agreements. CUSTOMS is the watchdog
3 types of EU trade agreements?
Customs Unions (eliminate customs duties, joint tariffs to foreign import)
Association Agreement, free trade agreement, economic partnership agreement
Remove or reduce tariff in bilateral trade
Partnership & Coop agreement: Framework for bilat econ relations, leave tariffs as they are
What is the basic definition of Yield Management?
The action taken to maximize profit by understanding and influencing consumer behaviour. Yield management can only be applied for resources that are fixed and perishable, which means that their count cannot be altered, and they cannot be stored for later use.
Maximizing yield happens through pricing, inventory management and selling strategy. A good example of a yield management application is a hotel that wants to reserve a maximum number of rooms to higher-paying, less price-sensitive business customers while making sure that none of the rooms end up being empty at the time of accommodation.
The four “rights” of yield management?
Selling the right product
To the right customer
At the right time
For the right price
What are application areas of yield management?
Traditional areas: air industry, hotel industry, car rental, rail, tour operators, cargo, cruise.
Non-traditional: energy, broadcast, healthcare, manufacturing, apparel, restaurants, golf etc.
What are the reasons behind different prices?
Economies of scale, high-value demand pays for high-cost seats and vice versa. Both groups benefit from sharing fixed costs.
Where and why firms practice yield management (5 characteristics)?
- It is expensive or impossible to store excess resource
- Commitments need to be made when future demand is uncertain
- The firm can differentiate among customer segments, and each segment has a different demand curve
- The same unit of capacity can be used to deliver many different products or services
- Producers are profit-oriented and have broad freedom of actions, meaning that they do not suffer from consequences of customer segmentation
What is booking limit in yield management?
Booking limit is the maximum number of product / service that may be sold at the discount price.
What is protection level in yield management?
Protection level is the number of products / service we will not sell to first segment of customers because of the possibility that second segment might book / buy later in time for bigger price.
Formula for calculating protection level F(Q) (critical ratio)
Given that we have a Q number of rooms/seats/etc. reserved to low-fare customer and a Q+1:th customer wants to book, we want to calculate the expected value of that unit being sold to a high-fare customer. This is done by multiplying the high-fare price by it’s the respective probability that it will actually be sold. If the expected value is greater than the low-fare price, it is not worth it to sell the unit at a lower price.
Describe overbooking + optimal level calculation
For example, in an airline flight, there is a possibility that a certain number of customer will not show up to the flight, leaving their seats unused. This creates a loss to the airline company due to opportunity cost of not being able to sell the seats again to customers. The only way of benefiting from absent customers is to predict their share from the total number of customers, and by using that calculation, selling “too many” tickets to the flight, or overbooking. Thus, in an optimal solution the actual amount of absent customers matches up with the amount of overbooked seats, and the plane leaves with every seat in use.
The risk is that the airline company has to turn down some customers in an event where there is too much customers showing up to the gate, leading to the company having to turn down some customers.
Calculation: given B as the price of a ticket and C as the net cost of having to “bump” or turn down a passenger, we can use the formula of critical ratio B / (B + C) to get a value that we can use to estimate the number of ticket to overbook, using for example a normal distribution of customers who book a flight but never show up.
Which megatrends will have an impact on Logistics and transportation?
- Digitization of logistics: AI/ML, autonomous driving
- Cost Pressures due to geo-political instability, de-globalization and sustainability requirements
- New technology firms are entering the industry at rapid pace
- Socio-economic factors create increasing demand from customers
What is the digitalization of Transport Documents and how can it be achieved?
- Transport Documents are interchanged digitally and automated between players in the supply chain
- Lowers the operational and administrative complexity, increases supply chain efficiency
- common transport documentation, data standards and exchange have to be established
- Message structures need to be harmonized to a common standard
What are potential benefits from utilizing logistics data?
Better cooperation between supply chain actors due to:
- Better supply chain visibility
- Realt-time management of traffic and cargo flows
- Simplification of administrative burden
- Improved utilization of logistics resources and assets while improving operational efficiency and decreasing cost
What are the key problems preventing industries from fully utilizing digitalization of transport documents?
To leverage benefits electronic data should flow seamlessly through supply chains. Standardization of Data models and harmonization of digital data exchange is key! Even though standards have been established and technology has been developed, integration is advancing at slow pace because:
- People do not trust each other
- Logistic information Systems need to be changed, little incentive to do so
- Benefit sharing in the supply chain (benefit not primarily for the one introducing new system)
Describe the DBE core concept
From their website: The Digital Business Ecosystem is an open development platform that aims to create new value by integrating supply chain processes and data. DBE brings an easy solution for digital information exchange. The goal is to get all of our stakeholders to move towards standardised integration of business transactions and collaboration processes. We started with the Finnish process industry, and we’re aiming to grow the ecosystem across industries globally. DBE Core enables the integration of business processes by the aid of API integration. It can be widely used in the areas of sales, sourcing, procurement, logistics and transaction based financing.
What do increased activities in urban logistics imply for cities and how do they affect the livability?
Growing number of trucks in the urban areas imply more congestion, pollution and noise, also increased energy consumption and impacts on development of Local Retail. These factors have an impact on traffic safety, quality of life and urban economic competitiveness.
