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Chapter 3: Q16-8PE (page 421)

Question:Used to describe functions related to the flow of material in a supply chain.

Short Answer

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Answer

Logistics describes the functions related to the flow of material in a supply chain.

Step by step solution

01

Step-by-Step Solution Step 1: About logistics

Logistics refers to the project of the overall management of the inventory and the finished goods and their storage as well as their on-time delivery. Logisticsis the flow of material from one place to another mainly from the manufacturers to the consumers.

02

Types of logistics

There are two typesof logistics:

  1. Inbound Logistics,
  2. Outbound Logistics.

Inbound logistics: Inbound logisticsrefers to the process in which the materials are taken inside the company from an outside source.

Outbound logistics:The process in which the materials are delivered outside the company to the consumers is consideredoutbound logistics.

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Most popular questions from this chapter

List at least four of the seven prominent types of waste that should be eliminated from the supply chain.

In some JIT systems, marked spaces on a table or the floor identify where material should be stored. Supplying operations are signaled to produce more when the space is empty. What are these spaces called?

One of your Taiwanese suppliers has bid on a new line of molded plastic parts that are currently being assembled at your plant. The supplier has bid \(0.10 per part, given a forecast you provided of 200,000 parts in year 1; 300,000 in year 2; and 500,000 in year 3. Shipping and handling of parts from the supplier’s factory are estimated at \)0.01 per unit. Additional inventory handling charges should amount to \(0.005 per unit. Finally, administrative costs are estimated at \)20 per month. Although your plant can continue producing the part, the plant would need to invest in another molding machine, which would cost \(10,000. Direct materials can be purchased for \)0.05 per unit. Direct labor is estimated at \(0.03 per unit plus a 50 percent surcharge for benefits; indirect labor is estimated at \)0.011 per unit plus 50 percent benefits. Up-front engineering and design costs will amount to $30,000. Finally, management has insisted that overhead be allocated if the parts are made in-house at a rate of 100 percent of direct labor cost. The firm uses a cost of capital of 15 percent per year. What should you do, continue to produce in-house, or accept the bid from your Taiwanese supplier?

Question:Outline a plan for introducing lean at Quality Parts Company.

When a customer allows the supplier to manage inventory policy for an item or group of items.
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