By Dang Minh S3357843 – Upload by RMIT Vietnam Helpdesk Team

Topic 1: Overview of Logistics & Supply Chain Management

4. Explain the concept of ‘integrated logistics’.

Integrated logistics: A comprehensive, system-wide view of the entire supply chain as a
single process, from raw materials supply through finished goods distribution. All functions
that make up the supply chain are managed as a single entity, rather than managing
individual functions separately

5. Discuss the ‘total cost concept’ in the context of a supply chain.

Total cost concept: An approach to managing systems where potential changes are
evaluated on the impact of the change on total cost of the system.

6. Discuss the ‘value chain concept’ in the context of a supply chain.

Value chain concept: An approach to evaluating the overall performance of the organization
in terms of value contribution to profit margin of the various primaries and supporting areas
in an organization.

7. Describe the three flows

8. Explain why a supply chain is referred to as an extended enterprise.

An extended enterprise that crosses the boundaries of individual firms to span the related
activities of all the companies involved in the total supply chain
13. There are five principal types of economic utility that add value to a product or service.
Name four of the five and pick three to discuss in more detail.

The five principal types of economic utility which add value to a product or service are:

⬜ form (what)

⬜ time (when)

⬜ place (where)

⬜ Quantity (how much)

⬜ Possession (why)

Topic 2: Demand Management & Order Fulfilment

3 Customer service can be viewed as having four distinct dimensions (elements). Name all
four and discuss each.
1. TIME
2. DEPENDABILITY
3. COMMUNICATIONS
4. CONVENIENCE

5 Explain order cycle length and order cycle variability. Which of the two, length or
variability, is a more important measure when evaluating the performance of a supplier?
Give two reasons for your choice.
• -Order cycle (Usually measured in average time from order to delivery)Order-2-Cash
… until Payment

Order cycle length : is an average of the time from shipment to receive the product
for example : 3 delivery each delivery take 4-5-6 weeks. The average of order cycle
length is 5 weeks

order cycle variability : same as variation in Statistic class, it is the accurate of the
delivery, for example: 3 delivery , each take 3 weeks, 6 weeks, and 9 weeks, the
variability is too large , 3 week, you don’t really sure when you receive it

The order cycle variability is more important because the less it is the more on time
delivery.
6. Name and explain the five outputs in order management that influence customer
service.

Product Availability  
Metric: item fill rate, line fill rate, order fill rate, and perfect
order

Order Cycle Time

Metric: order cycle time, lead time, customer wait time

Logistics Operations Responsiveness

Metric: a number of LOR metrics are available from the
SCOR Model (Supply Chain Council)
Responsiveness to changes in Delivery & Manufacturing

Logistics System Information

Metric: forecast accuracy, inventory accuracy, data integrity

Postsale Logistics Support

Metric (product returns): time to return a product
Metric (spare parts): order fill, inventory availability, and order
cycle time.

8 There are ten characteristics of supply chain metrics. Name and discuss five.

Do it yourself :P

11 Discuss how a seller’s cost influences a customer’s profit, and how a seller’ service
impacts a customer’s revenue.
The more cost of the seller’s lead to the less profit of customer.
The more efficiency of seller’s service the better impacts on customer’s revenue
(Axel 2013, he did answer like that)
13 Discuss the ‘bullwhip effect’.

Fluctuations between the projected demand and the actual demand

(demand variability)
Demand variability increases as you move the supply chain
The phenomenon is the demand at retailer level increase small but makes the supply chains
supply large amount (costly)

Look at the figure, at the consumers level , they only demand more 6 product per day, but
at the retailers level they have to order more 42 products, because they order once a week
(6x7 = 42).
Then the order of retailer come to the whole seller, whole seller order once a month, they
have to increase the order quantity to 168 per month (42x4 =168 ).

And so on...and so on….. Now you can see, the demand increase 6 in one day and lead to
168 in a month, it not actually demand. Just a short term but affect the whole supply chain.
15 Define and discuss Collaborative Planning, Forecasting, and Replenishment (CPFR) and
its impacts on supply chain management. Include in your discussion four benefits to the
supply chain when implementing the CPFR model.

Collaborative Planning, Forecasting, Replenishment

• Sharing Sales/Inventory Data

• Sharing Expected Promotion and Price Impacts
• Sharing Expected Forecasts
• Collaborating to Eliminate different perspectives on consumption.
Impact
• Real value of CPFR comes from sharing of forecasts among firms rather than
sophisticated algorithms from only one firm
• Does away with the shifting of inventories among trading partners that suboptimizes
performance of the supply chain
• CPFR provides the supply chain with a plethora of benefits but requires a
fundamental change in the way that buyers & sellers work together

Benefit:
• Improved forecasting for the supply chain
• Reduced inventories in the system
• Lower operating costs
• Reduced cycle time
• Fewer stockouts
• Supports well a make-to-order production model

16 Define channels of distribution and what are three benefits that come from the
effective design of channels of distribution? Are channels of distribution the same as
marketing channels? Are channels of distribution the same as logistics channels? Explain.

• Definition
– one or more companies or individuals who participate in the flow of
goods / services from manufacturer to end customer (consumer)
– Can be perceived as the physical structures and intermediaries by which
these flow
• Variety of intermediary firms
– Wholesalers/distributors
– retailers
– service providers
– brokers

Logistics Channel
Refers to the means which products flow physically from where they are available to
where they are needed
**Marketing Channel
Refers to the means by which necessary transactional elements are manage
TOPIC 3: Procurement – Sourcing & Buying

1. Define ‘purchasing’, ‘procurement’, and ‘strategic sourcing’. Discuss the differences

between these three concepts.

-Purchasing: The transactional function of buying products and services. In a business

setting, this commonly involves the placement and processing of a purchase order.
-Procurement: Refers to the process of managing a broad range of processes that are
associated with a company’s need to procure goods and services that are required to
manufacture a product (direct) or to operate the organization (indirect).
-Strategic sourcing: Essentially, the strategic sourcing process is broader and more
comprehensive than the procurement process. Strategic sourcing takes the process further,
focuses more on supply chain impacts of procurement and purchasing decisions, and works
cross-functionally within the business firm to help achieve the organization’s overall
business goals.

4. Name four criteria that are important in vendor selection. Discuss each. Which one of the
criteria is the most important?
5. For the buyer, the total procurement price is more than just the basic purchase price. There are
other elements to consider. Name these, and discuss the primary considerations of each.

7. What are three advantages of e-procurement?

Topic 4. Production & Operations Management

5. The textbook introduces us to four strategies in production. Specify all

four and discuss two of these.
Made-to-stock (MTS)

Traditional production method where finished items are usually produced before
receipt of customers orders (anticipated demand)

Customers orders filled with finished good inventories

Accurate forecasting and inventory control are critical

Works well for chemical, pharmaceutical, and energy end products

Assemble-to-order (ATO)

Production method combining of standard components and options or accessories

specified by customer

Finished goods not assembled until customer demand is known

Useful in repetitive manufacturing situations where a large number of end products

(based on the selection of options and accessories) can be assembled from common
components

Works well for automobiles and computers end products

Build-to-order (BTO)

– Production method also called make-to-order (MTO) by which assembly is delayed

until a confirmed order is received for the product

– The end product is a combination of standard and custom-designed components

that meet the unique needs of a specific customer

– Higher level of customization and lower volume than ATO

– A good choice for uniquely configured products like computer servers or where
holding inventories in anticipation of demand is expensive (e.g. aircraft)

Engineer-to-order (ETO)

– Production method focusing on the creation of highly tailored products for

customers whose specifications require unique engineering design or significant
customization

– Requires detailed cost estimates and tailored pricing

– Customers involved throughout the entire design and production process

 – Works well for capital equipment, industrial machinery, and highly technical items

TOPIC 5. Inventory Management

1. What is the rationale for a company to hold inventory? Give four reasons and explain each.
Reasons/Rationale for Inventory
• product line proliferation
• batching economies / cycle stocks
• uncertainty / safety stock
• time / in-transit tradeoffs
• work-in-process (WIP) inventory tradeoffs
• seasonal stocks
• anticipatory stocks
(Pre-Load/Work Leveling)

5. There are four main types of inventory costs. Discuss each.

-Inventory carrying cost
 capital cost
 storage space cost
  inventory service cost (MANPOWER)
 inventory risk cost
-Order/setup cost
 ordering cost
 setup cost
-Expected stock-out cost
-In-transit inventory carrying cost

6. There are four types of inventory carrying costs. Provide examples of each.
-Inventory carrying cost
 capital cost
 storage space cost
 inventory service cost (MANPOWER)
 inventory risk cost

8. Examine the relationship between inventory carrying cost and order-set up cost.

-If we decide to places mall orders, then we will keep small amounts of inventory in stock
(low inventory carrying cost ), but we will need to place more orders (high order/setup
cost )
-If we decide to place big orders, then we will keep big amounts of inventory in stock (high
inventory carrying cost ), but we will need to place less orders (low order/setup cost )
10. Cost of lost sales (‘expected stockout cost’) can be calculated by considering the derived costs
from one of four potential outcomes that could take place when a company does not hold enough
quantities of product to meet customer demand. Discuss each outcome and costs associated with
each. Explain the tradeoff between the cost of lost sales and safety stock.
• Expected Stock-out Cost
– supplier’s cost for not having the product available when a customer wants it
– includes backorder costs (special order)
– losing the sale to a competitor (one time substitution)
– losing a customer for life (permanent substitution)
– possible way to handle this is by adding safety stock
– for a manufacturer, stock-out may result in lost hours of production until the
item is restocked

12. Discuss the differences between ‘push’ systems and ‘pull’ systems of inventory management.
Name one inventory management system that works with the ‘push’ approach and one inventory
management system that works with the ‘pull’ approach.
• Pull v. Push
– Pull approach is a “reactive” system - relies on customer demand to “pull”
product through a logistics system, e.g. MacDonald’s
– Push approach is a “proactive” system. - uses inventory replenishment to
anticipate future demand, e.g. catering business
– Pull systems respond quickly to sudden changes in demand
– Involve one-way communication
– Short term forecast – allowing flexibility to respond to demand
– Apply more to independent demand situations
– Push systems use orderly/disciplined master plans for inventory management
– Long term forecast – allowing for scale of economies in manufacturing
– Apply more to dependent demand situations
– Pull systems include JIT, QR, EOQ, VMI
– Push systems include MRP, MRPII, DRP, EOQ, VMI

15. Discuss just-in-time (JIT). Include in your discussion the four elements that are necessary for a
JIT system to be successful.
• JIT (Just-in-time)
– Manufacturing philosophy commonly used for managing inventory
– Designed to manage lead times and eliminate wastes
– Substantially reduces the amount of inventory and operation costs
– widely-used and effective strategy for managing movement of parts,
materials, semi-finished products from points of supply to production
facilities
– product should arrive exactly when a firm needs it, no tolerance for early or
late deliveries
 – Four elements of JIT:
1) zero inventory 3) short consistent lead time
2) small frequent replenishments 4) zero defects

16. Discuss materials requirements planning (MRP). Include in your discussion three advantages of
MRP.

• MRP
– computerized information system developed specifically to aid in managing
and scheduling materials needed to produce a forecasted quantity of a
specific finished good
– consists on a set of logically related procedures, decision rules & records
designed to translate (explode) a master production schedule (MPS) into
time-phased net inventory requirements for each component item
– the plan will tell us what, how much, and when specific components parts are
required
– re-plans net requirements based on changes in schedule, demand, etc

18. Discuss vendor-managed inventory (VMI). Include in your discussion three advantages of VMI.
• VMI (Vendor-managed Inventory)
 Concept of VMI initiated by Wal-Mart so its suppliers could manage their
inventories within Wal-Mart distribution centers
 Basis of VMI is that suppliers could manage Wal-Mart’s inventories better
than Wal-Mart
 The supplier monitors on-hand inventories in the customer’s distribution
center and when these reach the agreed-upon reorder point, the supplier
creates an order for replenishment, notifies the customer’s distribution
center of quantity and time arrival, and ships the order

19. What are three benefits for a company in classifying inventory using the ABC Analysis? Give
examples of two criteria that could be used to classify inventory.
• ABC Analysis

– Assigns inventory items to one of three groups according to the relative impact or
value of the items

 A items are considered to be the most important

 B items being of lesser importance

 C items being the least important

Topic 6: Transportation & Freight Logistics

1. There are five “modes” of transportation. Name and discuss all five in detail making sure to
include challenges and/or obstacles.
3. What is ‘modal selection’? Why is modal selection important? How the five key
determinants (modal capabilities) affect the supply chain?
4. Which modes of transportation have an advantage and a disadvantage for each of the five
determinants (modal capabilities)?

• Modal Selection
• Accessibility
• Accessibility advantage: Motor carriage
• Accessibility disadvantage: Air, rail, and water
• Transit Time
• Transit time advantage: Air and motor carriage
• Transit time disadvantage: Rail, water, and pipeline
• Reliability
• Reliability advantage: Motor carriers and air carriers
• Reliability disadvantage: Water carriers and rail carriers
• Product Safety
• Safety advantage: Air transportation and motor carriage
• Safety disadvantage: Rail and water
•
• Cost
• Cost advantage: The cost of transportation service varies greatly
between and within the modes
• Cost disadvantage: Motor carriage and air transportation
8. Define and discuss ‘Transportation Management Systems’ (TMS).
• Transportation Management Systems (TMS)
-Critical applications include the following:
-Routing and scheduling
-proper planning of delivery routes has a major impact on customer satisfaction, supply
-chain performance, and organizational success
-Load planning
-effective preparation of safe, efficient deliveries
-Load tendering
-Status tracking (GPS)
-Appointment scheduling

10. Define and discuss ‘intermodal transportation’.

• Intermodal Transportation
– Two or more modes of transportation cooperating to move shipment using a
single rate
– Logistics managers look for the best way to move shipments by taking
advantage of multiple modes of transportation, each having certain useful
characteristics
• Intermodal Transportation
– Advantages
• Use the strong capabilities of two or more different modes in
movement
• Greater accessibility by linking modes
• Overall cost efficiency without sacrificing service quality or
accessibility
• Facilitates global trade
– Disadvantages
• Biggest disadvantage: carriers reluctant to participate
• Cultural bias towards using only one mode
• Equipment shortages, transfer facility congestion, and labour issues
create delivery delays and supply chain disruptions

11. What are some advantages of containerization?

• Intermodal Transportation – Containerization
– Development of standardized containers that are compatible with multiple
modes
– Product-handling characteristics
  Containerized freight
 Transload freight
– Container-on-Flat-Car (COFC)
 goods are placed in a large box, where they are untouched until they
arrive at the consignee's unloading dock
– Reduces theft, damage, multiple handling costs, intermodal transfer time
– changes materials handling from labor intensive to capital intensive
– may reduce costs from 10 to 20%

12. Discuss four roles of industrial packaging.

• Roles of Packaging
– when customized, packaging can provide another level of product
differentiation sought by customers
– protects the integrity and quality of the goods (protection)
– its design impacts an organization’s ability to use space and equipment
more effectively (unitization)
– ease of handling during materials handling and transportation
– provides information about the package contents
– helps to apportion the contents into servings or individual selling units
– information about the product (UPC barcode, manufacturer, distributor,
ingredients, weight,…)
–

Topic 7. Warehousing & Distribution Channels

1. Fulfilment facilities (i.e. distribution centres, warehouses, crossdocking facilities) help

organizations overcome challenges, support other logistics processes, and take advantage of
economies of scale. Name and discuss all roles of a fulfilment facility.
• Role of warehousing (distribution facilities)
– Adds value to firm’s products by creating time utility for raw materials,
industrial goods, & finished products
– Allows firms to use customer service as a dynamic value-adding competitive
tool
• Balancing supply and demand. Whether seasonal production must service year-
round demand (e.g., corn) or year-round production is needed to meet seasonal
demand (e.g., holiday wrapping paper), distribution facilities can stockpile inventory
to buffer supply and demand.
• Protecting against uncertainty. Distribution facilities can hold inventory for
protection against forecast errors, supply disruptions, and demand spikes.
• Allowing quantity purchase discounts. Suppliers often provide incentives to purchase
product in larger quantities. Distribution facilities can handle the quantities, reducing
the purchase cost per unit.
• Accumulation/ Sortation/ Allocation /Assortment
4. There are two options that can take place in a supply chain for the product flow requirements.
Name and discuss both, including advantages and disadvantages for each.
5. One of the key network design issues is inventory positioning. Name both strategies and discuss
the advantages and disadvantages for each.
Factor Centralized Decentralized

Substitutability Low High

Product Value High Low

Purchase Size Large Small

Special Warehousing Yes No

Product Line Diverse Limited

Customer Service Low High

6. Another of the key network design issues is facility ownership. Name and discuss all three
options, including advantages and disadvantages for each.

Public versus Contract versus Private

-Public warehousing costs are mostly all variable
Private warehousing costs have higher fixed cost
 Private warehousing requires a high and constant throughput volume to justify the
capital investment
-Public Warehousing advantages:
Limited capital investment
Flexibility
Public warehousing regulation:
Liability
Receipts
Contract Warehousing (3rd-Party Warehousing)
Customized version of Public Warehousing
Advantages:
Compensation for seasonality in products
-Increased geographical coverage
-Ability to test new markets
-Managerial expertise and dedicated resources
-Less strain on the balance sheet
-Possible reduction of transportation costs
-Specialized contracted services, such as labeling, packaging, light assembly, quality
assurance, fulfillment facility,…

8. Define and discuss ‘Warehouse Management Systems’ (WMS).

Warehouse Management Systems
-Software control system that improves product movement and storage operations
-Helps achieve high level of control, inventory accuracy, and productivity through direct
picking, direct replenishment, and direct put-away
value-added capabilities
 generate performance reports
 support paperless processes
 enable integration of materials handling equipment
 picking systems
 sorting systems
 leverage wireless communication
 labor management
 task interleaving
 systems integration
 activity-based costing/billing
 multi-function distribution

9. ‘Barcodes’ is the most widely used auto-ID capture technology used by retailers. Discuss three
benefits in using barcodes for logistics.
Topic 8 Supply Chain Technologies

2. What are the six drivers of supply chain excellence? Explain each.
-Connectivity
-Visibilities
-Collaboration
-Optimization
-Execution
-Speed
5. Discuss ‘Business Intelligence’ and what value does the use of this technology hold for a
supply chain.
• BI tools build upon traditional reports and outputs to provide managers capabilities
to analyze trends and problems
• Visibility of information provided by other associated technologies such as ERP and
RFID allows for more dynamic frequent analysis
• In addition to data collection and analysis capabilities, BI tools also supports
performance measurements e.g. scorecard versus goals
• Interest in BI tools are increasing
• Previous generations of BI tools are geared towards trained analysts who had
to define specific problems
• New generations of BI tools are becoming more user-friendly with emerging
capabilities that make analysis easier
• Use of simple dashboard to generate charts, graphs and maps are all
incorporated in the latest version of BI tools

6. Discuss ‘Enterprise Resource Planning’ and what benefits and value does the use of this
technology holds for a supply chain.
• ERP systems are multi-module application software platforms that help organizations
manage the important parts of their businesses
• ERP systems branch out to include supplier relationship management, customer
relationship management, and other supply chain components, the connections
between SCIS and ERP grow stronger
• ERP system provides a mechanism for supply chain members to efficiently share
information
• Value:
Best-of-breed - pick the best application for each individual function. Disadvantage -
software may not integrate well but this may not be a major issue in future
• Single integrator solution - pick all the desired applications from a single vendor
• Implementation Problems:
– Lack of top management commitment
– Lack of adequate resources
– Lack of proper training
– Lack of communication
– Incompatible system environment

7. Discuss ‘Radio-Frequency Identification’ (RFID) and what benefits and value does the
use of this technology holds for a supply chain.
 • RFID is an automatic identification method

• RFID tags consist of a microchip and a printed antenna that can be packaged
into many forms, such as a label, or imbedded in between the cardboard
layers in a carton or product packaging

• Unique product identification information, in the form of a universal electronic

product code (EPC) identifying the manufacturer, product category, and
individual item, is stored on these 96-bit tags

• RFID technology costs must continue to decline to make product tagging

economically feasible; equipment issues such as reader range, sensitivity,
and durability must improve; the case for supplier return on investment of
RFID mandates must be made; and consumer privacy issues must be
resolved

Topic 9 Supply Chain Relationships

2. Define what a “vendor” is, and discuss how this type of relationship takes place in
logistics, including its intensity of involvement.
-Vendor relationship
 little or no integration or collaboration
 Both parties in a vendor relationship are said to be at “arm’s length”

3. Define what a “partnership” is, and discuss how this type of relationship takes place in
logistics, including its intensity of involvement.
-Partnership
 customized relationship that results in better outcomes than could be
reached separately
 both organizations cooperate and willingly modify their business
objectives and practices to help achieve long-term goals and
objectives

4. Define what a “strategic alliance” is, and discuss how this type of relationship takes
place in logistics, including its intensity of involvement.
 Strategic alliance
 full integration and collaboration

7. Define “drivers” and “facilitators.” Provide three drivers and three facilitators a
company should consider when forming a relationship with another company.
 • Drivers

 Defined as “compelling reasons to partner”; all parties “must believe that they will
receive significant benefits in one or more areas and that these benefits would not be
possible without a partnership.”

• Facilitators
 Are defined as “supportive corporate environmental factors that enhance
partnership growth and development”; As such, they are the factors that, if present, can
help to ensure more the success of the relationship.

9. Define ‘third-party logistics’ (3PL). What are some advantages in using a third-party
logistics service provider?
• 3PLs
 External suppliers/service providers that perform all or part of a company’s logistics
functions, e.g.:
 Transportation-based
 Warehousing/distribution-based
 Forwarder-based
 Financial-based
 Information-based
 Integrated “solutions” to logistics/supply chain problems
• Also known as:
 Contract logistics
 Outsourcing

10. There are at least five types of third-party logistics firms. Name and discuss four.
1. Transportation-based

 Services extend beyond transportation to offer a comprehensive set of logistics offerings

 Leveraged 3PLs use assets of other firms

 Non-leveraged 3PLs use assets belonging solely to parent firm

 Examples: Ryder, Schneider Logistics, FedEx Logistics, UPS Logistics

2. Warehouse/Distribution-based

 Wide range of services in warehouse and/or distribution

 Transition to integrated logistics is less complex than for transportation-based 3PLs

 Examples: DSC Logistics, USCO, Exel, Caterpillar Logistics, IBM Logistics

3. Forwarder-based
-Essentially non-asset owners, very independent, dealing with a wide range of suppliers of
logistics services

- Capable in putting together logistics service packages to meet customer’s needs

-Non-asset owners capable of providing a wide range of logistics services

- Examples: AEI, Kuehne & Nagle, Fritz, Circle, C. H. Robinson, Hub Group

4. Financial-based

 Provide freight payment and auditing, cost accounting and control, and tools for
monitoring, booking, tracking, tracing, and managing inventory.

 Examples: Cass Information Systems, CTC, GE Information Services, FleetBoston

5. Information-based

 Significant growth and development in this alternative category of Internet-based,

business-to-business, electronic markets for transportation and logistics services

 Examples: Transplace, Nistevo

Topic 11: Reverse Logistics, Green Logistics, & Supply Chain

Sustainability

1. Define the concept ‘reverses logistics’ and discusses three reasons why
this logistics activity is important to the firm.

Definition of reverse logistics: (by the Reverse Logistics Executive Council)

– Reverse logistics is the process of planning, implementing, and

controlling the efficient, cost effective flow of raw materials, in-process
inventory, finished goods and related information from the point of
consumption to the point of origin for the purpose of recapturing value
or proper disposal

• This is exactly the same definition as that of business (or forward) logistics
except that the direction is reversed
 Recapturing value refers to asset recovery, reselling (in second-hand market),
remanufacturing and refurbishing activities

• Proper disposal refers to recycling programs, hazardous material programs,

and obsolete equipment disposition

• Other activities may include redesigning products and processes to reduce

waste (can be regarded as “green logistics”), reusing containers and recycling
packaging materials

• To most organizations, reverse logistics often refers to processing returned

merchandise due to damage, seasonal inventory, restock, salvage, recalls,
and excess inventory

• If no goods or materials are being sent "backward" for processing, the activity
is probably not a reverse logistics activity

2. Eight different categories of reverse flows exist. Discuss four of these

categories.
1. Products that have failed (unwanted, damaged, or defective) but can be repaired or
remanufactured and resold

2. Products that are old, obsolete, or near the end of their shell life but still have some value

3. Products that are unsold from retailers, usually referred to as overstocks that have resale
value

4. Products being recalled due to a safety or quality defect that may be repaired or salvaged

5. Products needing “pull and replace” repair before being put back into service

6. Products that can be recycled such as pallets, containers,…

7. Products or parts that can be remanufactured and resold

8. Scrap metal that can be recovered and used as raw material for further manufacturing