Logistic LO3

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Questions and Answers

What factors should distribution strategies be tailored to?

  • Market conditions and shipping costs
  • Product attributes and customer requirements (correct)
  • Supplier reliability and technology
  • Retail demand and advertising budget

Which of the following is a component of distribution planning?

  • Advertising strategy
  • Customer demographic analysis
  • Network design (correct)
  • Market competitiveness

What is one of the attributes that should be considered in distribution planning?

  • Overall advertising strategy
  • Employee satisfaction levels
  • Climate-controlled warehouse needs (correct)
  • Customer loyalty programs

What role does inventory positioning play in distribution planning?

<p>It impacts the location of facilities (A)</p> Signup and view all the answers

What should distribution strategies prioritize alongside supply chain demands?

<p>Execution cost efficiency (C)</p> Signup and view all the answers

Which of the following is NOT a factor in determining facility ownership in distribution planning?

<p>External climate conditions (B)</p> Signup and view all the answers

What does tactical planning within distribution capabilities focus on?

<p>Specific operational tasks (C)</p> Signup and view all the answers

Which aspect is considered when determining the number of facilities in distribution planning?

<p>Product location (A)</p> Signup and view all the answers

What is one of the primary roles identified in the loading process?

<p>Sorting mixed cartons (B)</p> Signup and view all the answers

What factor is crucial for determining the number of facilities needed in a supply chain?

<p>Cost trade-offs with other functional areas (C)</p> Signup and view all the answers

When selecting facility locations, what method is essential for effective decision-making?

<p>Analysis of customer locations and demand patterns (A)</p> Signup and view all the answers

What type of warehouse is owned and operated by a single organization?

<p>Private warehouse (B)</p> Signup and view all the answers

Which of the following is NOT a consideration for facility ownership decisions?

<p>Global market trends (C)</p> Signup and view all the answers

What is significant about the analysis of fulfillment costs?

<p>It impacts the number and location of distribution centers. (C)</p> Signup and view all the answers

What is the main advantage of using public warehouses?

<p>Flexibility in space usage (D)</p> Signup and view all the answers

Which of the following factors does NOT directly affect the number of warehouses needed?

<p>Warehouse design layout (D)</p> Signup and view all the answers

What type of warehouse involves sharing space among multiple users?

<p>Public warehouse (D)</p> Signup and view all the answers

What approach should organizations consider when deciding on facility ownership?

<p>Their operational expertise and task scope (A)</p> Signup and view all the answers

What is the relationship between the number of warehouses and transportation costs?

<p>More warehouses usually increase transportation costs. (A)</p> Signup and view all the answers

Which cost is likely to increase as the number of warehouses increases?

<p>Warehouse rental costs (B)</p> Signup and view all the answers

In the context of logistics, what do facility-level tradeoffs aim to balance?

<p>Financial resources and overall performance (B)</p> Signup and view all the answers

What is a potential downside of having too many warehouses in relation to customer service?

<p>Increased cost of lost sales (A)</p> Signup and view all the answers

How does warehousing affect inventory costs?

<p>Increased warehousing is associated with higher inventory holding costs. (B)</p> Signup and view all the answers

What is the main goal of balancing transportation and warehousing costs?

<p>Minimizing total logistics costs (C)</p> Signup and view all the answers

What happens to logistics costs as the number of warehouses increases, assuming all other factors remain constant?

<p>Logistics costs increase (D)</p> Signup and view all the answers

What type of tradeoff can be affected by the costs of lost sales?

<p>Warehouse vs. customer service (B)</p> Signup and view all the answers

Which cost is primarily impacted by the number of warehouses in a logistics system?

<p>Storage costs (C)</p> Signup and view all the answers

In logistics, what is a significant impact of poor warehouse management?

<p>Higher costs associated with errors and delays (D)</p> Signup and view all the answers

What formula is used to calculate the Unit Fill Rate?

<p>Total Units Shipped / Total Units Ordered (C)</p> Signup and view all the answers

Which metric measures the percentage of orders ready by the deadline?

<p>On Time Dispatch (B)</p> Signup and view all the answers

What is the main purpose of the Perfect Order Index?

<p>To evaluate order accuracy and punctuality (A)</p> Signup and view all the answers

Which formula is used to calculate Order Accuracy?

<p>Total Correct Units Shipped / Total Units Shipped (B)</p> Signup and view all the answers

What does the Case Fill Rate measure?

<p>Total Cases Shipped / Total Cases Ordered (A)</p> Signup and view all the answers

What is a key advantage of using public warehouses?

<p>Conservation of capital (A)</p> Signup and view all the answers

Which of the following is a disadvantage of public warehouses?

<p>Effective communication issues due to system incompatibility (B)</p> Signup and view all the answers

What defines a private warehouse?

<p>Used exclusively for the owner's distribution activities (C)</p> Signup and view all the answers

Which of the following benefits is NOT associated with contract warehouses?

<p>Immediate availability of space (A)</p> Signup and view all the answers

What is a major advantage of private warehouses compared to public warehouses?

<p>Greater control over operations (C)</p> Signup and view all the answers

Which of the following is a potential disadvantage of using a public warehouse?

<p>Space may not be available on demand (A)</p> Signup and view all the answers

Public warehouses are particularly beneficial for which of the following reasons?

<p>Expertise in management of warehousing (B)</p> Signup and view all the answers

What is an advantage of using public warehouses that contributes to operational efficiency?

<p>Distribution of overheads over a large customer base (D)</p> Signup and view all the answers

Which of the following is a reason a business might choose a contract warehouse?

<p>Performance of shipping and storage on a contract basis (B)</p> Signup and view all the answers

What benefit do private warehouses offer compared to public warehouses?

<p>Less costly operations on average (A)</p> Signup and view all the answers

How does the size of a facility impact its equipment needs?

<p>The larger the facility, the more equipment is necessary for distribution operations. (B)</p> Signup and view all the answers

What is the relationship between workforce size and facility throughput?

<p>An increase in workforce size allows for larger facility size and greater throughput. (D)</p> Signup and view all the answers

What effect does equipment automation have on labor requirements?

<p>Automation reduces labor requirements for materials handling. (A)</p> Signup and view all the answers

In terms of distribution operations, what can be inferred about the relationship between space and throughput?

<p>More space allows for increased throughput capabilities. (D)</p> Signup and view all the answers

What can be concluded about the trade-off between space and equipment in distribution planning?

<p>Larger facilities necessitate the use of more equipment for efficiency. (A)</p> Signup and view all the answers

What is a possible implication of having a larger workforce in the context of facility operations?

<p>It can increase the size of the facility and improve throughput. (A)</p> Signup and view all the answers

How does the level of equipment usage affect labor requirements in a distribution facility?

<p>Higher utilization of equipment generally lowers the necessity for labor. (D)</p> Signup and view all the answers

What is the overarching principle regarding the interaction of space, equipment, and workforce in distribution?

<p>An integrated approach to optimizing space, equipment, and manpower enhances overall operations. (D)</p> Signup and view all the answers

What is the primary function of a distribution center (DC) in the supply chain?

<p>To mix and ship a variety of products to retailers (D)</p> Signup and view all the answers

Which value-added role does not directly involve improving product handling at distribution facilities?

<p>Transportation scheduling (D)</p> Signup and view all the answers

Which type of warehouse primarily focuses on consolidating products before further distribution?

<p>Consolidation warehouse (B)</p> Signup and view all the answers

Which of the following is a key factor influencing the evolution of warehouse functions?

<p>Demand for more flexible distribution solutions (A)</p> Signup and view all the answers

In the context of value-adding roles, what does product kitting involve?

<p>Combining multiple items into a single package (B)</p> Signup and view all the answers

What type of warehouse method allows for expedited shipping by sorting goods directly for delivery without storing them?

<p>Cross-docking (D)</p> Signup and view all the answers

What is a potential disadvantage of implementing reverse logistics in distribution?

<p>Higher operational costs (A)</p> Signup and view all the answers

Which warehouse type is characterized by handling inventory returned from customers?

<p>Reverse logistics warehouse (C)</p> Signup and view all the answers

How does product postponement benefit supply chain management?

<p>By allowing more customization closer to the delivery point (D)</p> Signup and view all the answers

What role does inventory management play in value-adding distribution?

<p>It ensures visibility and control over inventory levels. (B)</p> Signup and view all the answers

What is the optimal percentage for warehouse capacity utilization to achieve effective operations?

<p>75% to 85% (D)</p> Signup and view all the answers

Which strategy is suggested for managing peak demand in warehouse operations?

<p>Build private facilities for 75% requirement and use public facilities for peaks. (B)</p> Signup and view all the answers

In the context of product handling, what is the primary purpose of the 'put-away' process?

<p>Filling storage and pick slots with received products. (A)</p> Signup and view all the answers

During order picking, which of the following tasks is included in the process?

<p>Verifying the SKU and quantity. (D)</p> Signup and view all the answers

What is a key requirement when moving pallets to shipping docks in warehouse operations?

<p>To ensure the accuracy of moves before delivery. (D)</p> Signup and view all the answers

How does the number of warehouses typically influence overall logistics costs?

<p>Generally results in increased overall logistics costs (B)</p> Signup and view all the answers

What is one of the trade-offs involved when determining the number of warehouses?

<p>Between transportation costs and customer service levels (D)</p> Signup and view all the answers

Which factor is primarily impacted by increasing the number of warehouses in a distribution network?

<p>Warehousing overhead costs (A)</p> Signup and view all the answers

What could be a downside of having too many warehouses in relation to inventory management?

<p>Increased total inventory levels (B)</p> Signup and view all the answers

What trade-off should be considered to balance financial resources in a logistics system?

<p>Operating costs versus service quality (D)</p> Signup and view all the answers

In a logistics framework, what is a potential consequence of efficient warehouse management?

<p>Lower warehousing costs (C)</p> Signup and view all the answers

Which logistical factor is likely to cause increased costs related to lost sales?

<p>Poor inventory control processes (C)</p> Signup and view all the answers

What is typically affected negatively when expanding the number of warehouses without adequate planning?

<p>Logistics overhead costs (B)</p> Signup and view all the answers

Which aspect could be considered a trade-off when managing warehousing and transportation?

<p>Distribution speed versus cost savings (B)</p> Signup and view all the answers

What does the concept of facility-level trade-offs primarily focus on?

<p>Maximizing performance against financial resources (B)</p> Signup and view all the answers

What primary consideration should be taken into account when estimating the size of a warehouse?

<p>Forecasted demand (C)</p> Signup and view all the answers

Which layout factor is essential for maximizing the efficiency of a warehouse?

<p>Product flow (C)</p> Signup and view all the answers

What is a potential outcome of improper warehouse design regarding material handling?

<p>Deterioration of products (B)</p> Signup and view all the answers

Which of the following is NOT a key factor to consider in the warehouse design process?

<p>Environmental sustainability initiatives (C)</p> Signup and view all the answers

Which method is recommended to ensure future efficiency in warehouse operations?

<p>Future proof your investment (A)</p> Signup and view all the answers

What aspect of warehouse management systems can contribute to improved warehouse efficiency?

<p>Using warehouse design tools (D)</p> Signup and view all the answers

Which factor should be assessed to optimize the yard space associated with a warehouse?

<p>Transportation network connections (C)</p> Signup and view all the answers

In the context of warehouse design, which action is essential to ensure smooth operation during peak demands?

<p>Know the peak requirement (D)</p> Signup and view all the answers

What is a consequence of inadequate consideration of external factors in warehouse design?

<p>Failure to meet stakeholder needs (A)</p> Signup and view all the answers

What is the primary goal when designing a warehouse layout?

<p>Maximizing the flow of materials and information (C)</p> Signup and view all the answers

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Study Notes

Distribution Planning and Strategy

  • A series of interrelated planning decisions should be made to ensure a distribution strategy can be executed at a reasonable cost.
  • Distribution strategies should tailor to
    • products handled.
    • customer requirements.
    • available internal expertise and resources.

Planning and Capability Requirements

  • Strategic Planning
    • Product Attributes: Climate-controlled warehouse required for products that need special climate conditions.
    • Flow Requirements: Determine number and role of facilities.
    • Roles to be Fulfilled: Accumulation, sortation, assortment..etc.
  • Tactical Planning
    • Facility Considerations:
      • Interior layout
      • Product location

Network Design

  • Number of Warehouses: Determine number and location of facilities based on costs and intended function.
  • Location of Facilities: Consider:
    • Sources and volume of supply
    • Customer locations and demand patterns
    • Related fulfillment costs

Facility Ownerships

  • Types of warehouse facilities:
    • Public
    • Private
    • Contract
    • Bonded
    • Government
    • Co-operative

Public Warehouses

  • Key advantages:
    • Conservation of capital
    • Use of space to meet peak requirements
    • Reduced risk
    • Economies of scale.
    • Flexibility
    • Tax advantages
    • Specific knowledge of storage and handling costs
  • Disadvantages:
    • Difficult effective communication due to system incompatibility.
    • Specialized services may not always be available.
    • Space may not be available on demand.

Private Warehouses

  • Key advantages:
    • Control
    • Flexibility
    • Less costly
    • Better use of Human resources
    • Tax benefits
    • Intangible benefits

Contract Warehouses

  • Key support functions:
    • Inventory control
    • Safety, maintenance, and sanitation
    • Security
    • Performance analysis
    • Information technology

Distribution Metrics

  • Customer-Facing Metric Examples:
    • Unit Fill Rate: Total Units Shipped / Total Units Ordered
    • Case Fill Rate: Total Cases Shipped / Total Cases Ordered
    • Order Value Fill Rate: Total Value Shipped / Total Value Ordered
    • Order Accuracy: Total Correct Units Shipped / Total Units Shipped
    • Document Accuracy: Total Correct Customer Invoices / Total Customer Invoices
    • On Time Dispatch: Total Orders ready by Deadline / Total Orders Dispatched
    • Perfect Order Index: Complete Order % x Damage Free % x Billing Accuracy % x On-Time Dispatch %

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