Characteristics Of Effective Logistics

A add together chain is an integrated manufacturing mental process which involves diverse business units working together to acquire and transform huffy materials into final merchandises which be then delivered to the node (Beamon, 1998). The gear up hang on chain strategy depends on several(prenominal) factors. A product characterized by stable call for and tried and true supply cannot be managed in the same manner as one characterized by unstable charter and unreliable supply. (Lee 2011). essential predictability is associated with product type, operating(a) versus innovation. Functional products are characterized by mortified demand indecision, more predictable demand, stable demand, long product life, low memorial cost, low service margin, low product variety, broad(prenominal) pile per SKU, low pains-out cost and low obsolescence Example include basic fiber foods. Innovative products are characterized by gamy demand uncertainty, sticky to forecast , variable demand, high inventory cost, high profit margins, high product variety, low volume per SKU, high stock-out cost and high obsolescence. In the absence of direct information on the essential requirement of the customer, organizations are forced to make forecasts. To keep off the mishap of stock-outs most organizations carry refuge stock.

What happens is that as we touch off save up the supply chain the magnitude of the safety stock carried increases. This phenomenon is referred to as the bullwhip effect. (Lee et al 1997)The effects of this include squanderer inventory, excessive capacity, insufficient capacity, long backlogs and uncertainty in ware planning. mavin of the major problems that affect performanc! e is uncertainty. There are devil parameters to uncertainty. Uncertainty in demand and uncertainty in send quantify. One of the major effects of lead time uncertainty is the bull whip effect which results in increases in supply chain cost and decrease in customer process level (Heydari et al 2009). Advances in information engineering science has allowed for...If you indirect request to get a full essay, do it on our website: OrderEssay.net

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