Define the term logistics and briefly discuss any three important logistics decisions

Question

What will be an ideal response?

Answer 1

Logistics is the process whereby products or services are delivered to the customer. The five important decisions presented in the text are (1 ) degree of ownership, (2 ) facility location, (3 ) mode selection, (4 ) capacity level, and (5 ) amount of cross docking.
Ownership. The firm has the most control over the logistics process if it owns and operates it, thereby becoming a private carrier. Although this approach may help to better achieve the firm's competitive priorities, the cost of equipment, labor, facilities, and maintenance could be high. The firm could instead leave the distribution to a third-party logistics provider (3PL), negotiating with the carrier for specific services. Those services could involve taking over a major portion of the order fulfillment process. 3PLs typically provide integrated services, from transportation and packaging services to warehousing and inventory management, for corporate clients that need to get their products to market. They can help with the design of a client's supply chain and facilitate the flow of information up and down the supply chain. Facility Location. A critical decision affecting the effectiveness of supply chains is the location of facilities that serve as points of service, storage, or manufacture. Mode Selection. The five basic modes of transportation are (1 ) truck, (2 ) train, (3 ) ship, (4 ) pipeline, and (5 ) airplane. The drivers for the selection should be the firm's competitive priorities. Capacity. The performance of a logistics process is directly linked to its capacity. The ownership decision and the modal selection decision are often intertwined because the question of how much capacity is needed must be resolved.