INTRODUCTION

With an increased and globalized marketplace, local companies are suffering from greater competition
from both domestic and foreign actors. With globalization and pressure from customers for faster
deliveries, lower prices, and higher variability in choice of products , it is expected that manufacturing
companies strive for a more efficient production.In general, the aim is to reduce what each product costs
to make, and thereby enable a more attractive offer to potential customers.There is, however, often a
tradeoff being made between cost and other performance objectives when efficiency is strived for.

A point where inventory is positioned to allow the production process independently of the customer
order delivery process is the customer order decoupling point.customer order decoupling point is
defined as the mode in the value chain analysis for a product where prouct is specific order placed by a
customer. It is also called the point of customization where customers triggers the production activities.

(http://www.diva-portal.org/ accessed at 09:44, 06/20/2020

CHAPTER 1
four different trade-offs within and/or between logistics functions

Functional Trade-offs

1: Warehouse Transportation Trade off

When number of warehouses increases logistics cost will increase because of more operations cost. But
transportation cost will come down because of less distances which has to be covered to reach to the
customer locations.

2:-Warehouse Inventory tradeoff

When number of warehouse increase warehouse cost increases and inventory cost will also increase
because beyond certain limits more inventories needs to be positioned in different location.

3:Warehouse service tradeoff

When number of warehouse increases cost of lost sales decrease because of less transportation cost
involved and warehousing cost will increase over the period of time because of more operational cost.

4:Information processing systems

Logistics is the way your company organizes its transportation, warehousing, inventory, customer service
and information processing systems