Logistical Management

Question 1

What is inventory management?

Answer 1

The concern with sourcing and storage of raw materials (for secornary businesses) or supplies of finished goods (for tertiary businesses)

Question 2

What is logistical management of inventory?

Answer 2

The process of dealing with the entire order from start to finish

Question 3

What are logistic managers responsible for?

Answer 3

• Inventory (liasing with suppliers for goods)
• Storage and warehousing (ensuring the appropriate storage of inventory)
• Order processing (ensuring customers recieve the correct product)
• Distrubuting (deciding on the correct methods of distrubution)
• They mist be aware of external factors that could affect distrubution

Question 4

What are examples of distrubution methods?

Answer 4

• Rail,road,sea and air
• Utilities infrastructure
• Satellite/cable/mobile networks

Question 5

What are consequences of overstocking?

Answer 5

• Cash flow is tied up
• Stock may go out of date
• Stock could go out of fashion
• High risk of theft
• Costs are high due to holding costs

Question 6

What are consiquences of understocking?

Answer 6

• There may be an incease in administration costs
• Stock may run out so stops production
• No benefit from bulk buying discounts
• No stock results in a bad reputation and customers not returning
• Increase in delivery costs due to more deviveries