Logistics Essay

648 WordsJul 3, 20133 Pages
In this memo everyone will be able to understand the difference between strategic role in competitive, product, and spatial relationship, relationships between the logistics systems and cost, able to identify techniques used to perform a logistics system analysis, and most of all the approaches that analyze logistics systems. There are four sub-categories under the competitive relationships:  Competitive Relationship Frequently, competition is narrowly interpreted only in terms of price competition. While price is certainly important, in many markets customer service can be a very important form of competition.  Order cycle can be defined as the time that elapses from when a customer places an order until the order is received.  Substitutability very often affects the importance of customer service. In other words, if a product is similar to other products, consumers might be willing to substitute a competitive product if a stock out occurs.  Inventory Effect an inverse relationship exists between the cost of lost sales and inventory cost. However, organizations are usually willing to increase the inventory cost only until total costs start to increase.  Transportation Effect Organizations can usually trade off increased transportation costs against decreased lost sales costs. Under the Product Relationship there are four sub-categories:  Product Relationship A number of product-related factors affect the cost and importance of logistics. Among the more significant of these are dollar values, density, susceptibility to damage, and the need for special handling.  Dollar Value Several product aspects have a direct bearing on logistics costs. First, the product’s dollar value typically affects warehousing costs, inventory costs, transportation costs, packaging costs, and even materials-handling costs.  Density Another factor that

More about Logistics Essay

Open Document