Characteristics Of Effective Logistics

A add unneurotic set up is an integrated manufacturing passage which involves diverse business units work to worryher to acquire and switch over huffy materials into final merchandises which be then delivered to the customer (Beamon, 1998). The reprobate hang on chain strategy depends on some(prenominal) factors. A product characterized by steadfast pick out and steady-going tack on cannot be managed in the same manner as one characterized by inconstant motivation and unreliable supply. (Lee 2011). inquire predictability is associated with product type, operating(a) versus innovation. Functional products argon characterized by pitiful demand indecision, more predictable demand, stable demand, farseeing product life, minuscule memorial salute, piteous gains margin, low product variety, broad(prenominal) upsurge per SKU, low pains-out cost and low obsolescence Example include staple fiber fiber foods. Innovative products atomic number 18 characterized by gamy demand uncertainty, sticky to forecast, variable demand, extravagantly inventory cost, high profit margins, high product variety, low volume per SKU, high stock-out be and high obsolescence. In the absence of direct information on the essential requirement of the customer, organizations be forced to make forecasts. To empty the mishap of stock-outs most organizations contract safety stock.

What happens is that as we hold up save up the supply chain the magnitude of the safety stock carried increases. This phenomenon is referred to as the bull pip effect. (Lee et al 1997)The effects of this include degenerate inventory, excessive capacity, insufficient capacity, long backlogs and uncertainty in product planning. mavin of the major problems that go performance is uncertainty. There are devil parameters to uncertainty. Uncertainty in demand and uncertainty in send season. 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 has allowed for...If you indirect request to get a full essay, post it on our website: Ordercustompaper.com

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