Impact of Product Classes on Logistics Plans and Decisions

Slides:

Advertisements

Similar presentations

Inventory Control Models.

Advertisements

Operations Management Maintenance and Reliability Chapter 17

Copyright © 2009 Pearson Education, Inc. Publishing as Pearson Addison-Wesley Chapter 5 FUTURE POPULATION TRENDS.

Facility Location Decisions

1 When to Plan? Demand (volume, dispersion, predictability) Customer service requirements (customer expectations and competition) Product characteristics.

Inventory Management II Lot Sizing Lecture 5 ESD.260 Fall 2003 Caplice.

Inventory BA 339 Mellie Pullman

Independent Demand Inventory Systems

Inventory Fundamentals

Foundations of Chapter M A R K E T I N G Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Understanding Pricing 13.

Chapter foundations of Chapter M A R K E T I N G Understanding Pricing 13.

Capacity Management Planning the resource capacity that a firm will need to meet its demand.

Capacity Planning For Products and Services

© 2004 by Prentice Hall, Inc., Upper Saddle River, N.J S 7-1 Operations Management Capacity Planning Supplement 7.

© 2006 Prentice Hall, Inc.8 – 1 Operations Management Chapter 8 – Location Strategies © 2006 Prentice Hall, Inc. PowerPoint presentation to accompany Heizer/Render.

© 2006 Prentice Hall, Inc.8 – 1 Operations Management Chapter 8 – Location Strategies © 2006 Prentice Hall, Inc. PowerPoint presentation to accompany Heizer/Render.

Addition 1’s to 20.

Transparency Masters to accompany Operations Management, 5E (Heizer & Render) 1-6 © 1998 by Prentice Hall, Inc. A Simon & Schuster Company Upper Saddle.

Figures in Chapter 1. Learning objectives After studying this chapter, you should be able to; Define logistics and supply chain management. Describe logistics.

Pricing: Understanding and Capturing Customer Value

Setting Product Strategy

Operations Management Inventory Management Chapter 12

Chapter 11 Managing Fixed-Income Investments 11-2 Irwin/McGraw-hill © The McGraw-Hill Companies, Inc., 1998 Managing Fixed Income Securities: Basic Strategies.

Business Processes Sales Order Management Aggregate Planning Master Scheduling Production Activity Control Quality Control Distribution Mngt. © 2001 Victor.

Product and Pricing Strategies

Global Manufacturing and Materials Management

Logistics Network Configuration

To accompany Quantitative Analysis for Management, 8e by Render/Stair/Hanna 6-1 © 2003 by Prentice Hall, Inc. Upper Saddle River, NJ Chapter 6 Inventory.

Operations Management

Chapter 3 The logistics product

Inventory Management. Introduction What: Managing Inventory Where: Any business that maintains inventory Why: Inventory is a significant contributor to.

1 Lecture 6 Inventory Management Chapter Types of Inventories  Raw materials & purchased parts  Partially completed goods called work in progress.

Transparency Masters to accompany Operations Management, 5E (Heizer & Render) 4-20 © 1998 by Prentice Hall, Inc. A Simon & Schuster Company Upper Saddle.

Transparency Masters to accompany Operations Management, 5E (Heizer & Render) 4-20 © 1998 by Prentice Hall, Inc. A Simon & Schuster Company Upper Saddle.

Chapter 10 Supply-Chain Strategy

1 Operations Management Inventory Management. 2 The Functions of Inventory To have a stock of goods that will provide a “selection” for customers To take.

CHAPTER 7 Managing Inventories

Instructor’s Manual with Transparency Masters to accompany Introduction to Risk Management and Insurance, 7E - Dorfman © 2002 by Prentice Hall, Inc. A.

Chapter 3: The Product 1. Classification. 2. Life Cycle.

Marketing and Distribution

Marketing. Marketing Activities Buying – Obtaining a product to be resold; involves finding suppliers that can provide the right products in the right.

12 - 1© 2011 Pearson Education, Inc. publishing as Prentice Hall Importance of Inventory One of the most expensive assets of many companies Can be 50%

Slides 6 Distribution Strategies

©2003 Prentice Hall, Inc.To accompany A Framework for Marketing Management, 2 nd Edition Slide 0 in Chapter 15 Chapter 15 Managing Retailing, Wholesaling,

Inventory Stock of items held to meet future demand

Module 2 Managing Material flow. Inventory Management 5.

© 2008 Prentice Hall, Inc.13 – 1 Operations Management Chapter 13 – Aggregate Planning PowerPoint presentation to accompany Heizer/Render Principles of.

3-1 The Logistics/Supply Chain Product “Logistics/Supply Chain managers are ‘owners’ of the product-flow process from raw material sources to final consumers,

Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e © 2004 by Prentice Hall, Inc.,

Inventory Management.  Inventory is one of the most expensive assets of many companies.  It represents as much as 60% of total invested capital. Inventory.

Understanding Inventory Fundamentals CHAPTER SEVEN McGraw-Hill/Irwin Copyright © 2011 by the McGraw-Hill Companies, Inc. All rights reserved.

Logistics Management LSM 730 Lecture 8 Dr. Khurrum S. Mughal.

Introduction to Supply Chain Management Designing & Managing the Supply Chain Chapter 1 Byung-Hyun Ha

Transparency Masters to accompany Heizer/Render – Principles of Operations Management, 5e, and Operations Management, 7e 9-1 © 2004 by Prentice Hall, Inc.,

Logistics Management LSM 730 Lecture 11 Dr. Khurrum S. Mughal.

1 Sales Time Less time to make profit Higher risk of obsolescence Market Late Entrant Obsolescent Stock Shorter life cycles make timing crucial.

1-1 Logistics Management LSM 730 Dr. Khurrum S. Mughal Lecture 12.

CHAPTER 8 Inventory Management © Pearson Education, Inc. publishing as Prentice Hall.

ABC Analysis Prof. Costas Panou Lecture #6 in M.Sc New Technologies in Shipping and Transportation.

3-1 The Logistics/Supply Chain Product “Logistics/Supply Chain managers are ‘owners’ of the product-flow process from raw material sources to final consumers,

12 - 1© 2014 Pearson Education, Inc. Inventory Management PowerPoint presentation to accompany Heizer and Render Operations Management, Eleventh Edition.

1-1 Logistics Management LSM 730 Dr. Khurrum S. Mughal Lecture 10.

Inventory Stock of items held to meet future demand

Chapter 10 Supply-Chain Strategy

Product and Pricing Strategies

Management Science 2 Material Requirements Planning (MRP)

إدارة اللوجستيات وسلاسل الإمداد

Chap12 Inventory Management Heizer and Render

Business Logistics Management

Presentation transcript:

Impact of Product Classes on Logistics Plans and Decisions Consumer Goods Convenient Goods Shopping Goods Specialty Goods Industrial Goods

Product Characteristics Impacts on Planning Product life cycle 80-20 rule Individual characteristics: Weight-Bulk ratio (ration of weight to volume, density; e.g. cotton vs. steel) Value-Weight ratio (coal vs. jewelry) Substitutability (customer’s reaction when not in stock) Risk characteristics (perishability, flammability, ease of being stolen)

Product Life Cycle Sales Volume Time Introduction Maturity Growth Decline

80-20 Rule and ABC Classification

The 80-20 curve with an Arbitrary Product Classification Total Sales(%) Total Items(%) A C B 20 50

ABC Analysis Divides on-hand inventory into 3 classes A class, B class, C class Basis is usually annual $ volume $ volume = Annual demand x Unit cost Policies based on ABC analysis A items receives wide geographic distribution through many warehouses, with high levels of stock availability Give tighter physical control of A items Forecast A items more carefully C items might be distributed from a single, central stocking point(e.g. plant), with lower total stocking levels than for the A items B items would have an intermediate distribution strategy where few regional warehouses are used © 1998 by Prentice Hall, Inc. A Simon & Schuster Company Upper Saddle River, N.J. 07458 Transparency Masters to accompany Operations Management, 5E (Heizer & Render) 12-13 13

Inventory Value of the Products in a Warehouse 80-20 rule and ABC analysis can be used as the basis of grouping the products in a warehouse y= (1+A)x A+X where, Y= Fraction of cumulative sales X= Fraction of items A: constant to be determined If the relation between X and Y is already known: A= X(1-Y) (Y-X)

Product Characteristics Weight- Bulk Ratio Value-Weight Ratio Substitutability Risk Characteristics

Logistics Cost as a percentage of sales price Increasing Weight-bulk ratio Logistics Cost as a percentage of sales price Storage Cost Transportaiton Cost Total Cost Generalized Effect of Product Density on Logistics Cost

Logistics Cost as a percentage of sales price Generalized Effect of Value-weight Ratio on Logistics Cost Increasing value-weight ratio Logistics Cost as a percentage of sales price Transportation cost Storage Cost Total Cost

Effect of Improved Transportation on Logistics Cost for a given level of substitutability Improved transportation service Storage Cost Lost Sale cost Transport cost Total cost Logistics cost as a percent of price

Effect of Average Inventory Level on Logistics Cost for a Given Level of Substitutability tics cost as a percentage of price Transportation cost Lost Sale cost Storage cost Total cost

Generalized Effect of Product Risk On Logistics Cost Increasing Level of Risk of the Product Costs Storage Cost Transportation Cost Total Cost