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P15027
The warehouse is
where the supply
chain holds or
stores goods.
Functions of
warehousing include:
Transportation
consolidation
Product mixing
Cross-docking
Service
Protection against
contingencies
Smoothing
1. Transportation
Inbound Versus outbound logistics
1. Ownership
2. Centralized or Decentralized
Warehousing
How many
Location
Size
Layout
What products where
1a. Public
warehousing costs
mostly all variable.
1c. Private
warehousing costs
have a higher fixed
cost component.
Thus private
warehousing
virtually requires a
high and constant
volume.
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Public warehousing
regulation:
Liability
Receipts
Public warehousing
rates are based upon:
Value
Fragility
Potential damage
to other goods
Volume and
regularity
Weight density
Services required
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Factor
Centralized
Decentralize
d
Substitutability
Low
High
Product Value
High
Low
Purchase Size
Large
Small
Special
Warehousing
Yes
No
Product Line
Diverse
Limited
Customer Service
Low
High
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Inventory costs
Warehousing costs
Transportation costs
Cost of lost sales
Maintenance of customer service levels
Service small quantity buyers
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1) Market positioned:
a) Order Cycle time
b) Transportation cost
c) Sensitivity of the product
d) Order sizes
2) Product positioned:
a) Perishability of the raw materials
b) Number of products in the product mix
c) Assortments ordered by the customers from the product mix
d) Transportation consolidation rates
3) Intermediately positioned
Cost of construction.
Pilferage Protection:
Transport involves
Equipment
People
Decisions
When deciding the transport mode for a given product there are
several things to consider:
Mode price
Transit time and variability (reliability)
Potential for loss or damage.
Air
Rapidly growing segment of transportation industry
Lightweight, small items
Quick, reliable, expensive
Rail
Low cost, high-volume
Improving flexibility
intermodal service
Road :
Company has flexibility of deciding the drop points .
The operation can be 24 x 7
The risk of Industrial action is minimized.
Insurance, Claims on truckers are quite streamlined.
Ropeways:
Water
Pipeline
Fixed costs:
Transport equipment
Carrier administration
Roadway acquisition and maintenance
Variable costs:
Fuel
Labor
Equipment maintenance
Handling, pickup & delivery, taxes
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