MKT420

TUTORIAL 10
(DISTRIBUTION CHANNELS AND LOGISTICS
MANAGEMENT)

NAME : FADZLIN SYAFIQAH BINTI FAHIZAN

MATRIK NO : 2018286066
CLASS : BA2421C
LECTURER’S NAME : MADAM ZUHAIRAH HASAN
1. The ultimate goal of marketing logistics is to provide a targeted level of customer service at
the least cost. Classify four (4) major logistics functions marketer must take into account when
designing a logistics system that will minimize costs.

The storing, handling and moving of products and services so that the customers can get them
at the right time, at the right place and in the right assortments is called logistics and function
related with such activities are known as logistic function. Logistic function or logistic system is
designed on the basis of the stated logistics objectives so that minimum cost would incur for the
accomplishment of these objectives. The major logistics functions are warehousing, inventory
management, transportation and logistics information management.

The first major logistics functions are warehousing. Almost every organization is bound to
store its products because there is some gap in the production and consumption. An organization
must determine about the important aspects of the functions of warehousing like how many
warehouses are required, which kinds of warehouses are needed and the locations of the
warehouses. Warehousing can take the following two forms which are storage warehouses and
distribution centers. Storage warehouses can be used for goods that can be stored from average to
long periods. In contrast, distribution centers are much more sophisticated in a way that they are
involved more in the movement of goods and less in the storage. These distribution centers are
highly automated and larger that are designed for the receipt of goods from various suppliers and
plants. Orders from customers are received and processed efficiently and quick distribution of
the ordered goods is made in these centers.

The inventory management is also one of major logistic function in which the effective level
of inventory is maintained. The major issue in this function is to keep a complicated balance
between carrying less inventory and carry too much of it. Carrying too much inventory is
resulted stock obsolescence and higher inventory carrying costs. On the other hand carrying of
little inventory results in costly production and emergency shipment, stock outs and finally
customer dissatisfaction. So, the management of the organization makes an effective inventory
decision by comparing the inventory carrying costs with the generating sales and profits. In
recent years new Inventory Management System has replaced the old high cost incurring
methods. Just-in-Time is one of the effective inventory systems in which the level of inventory
maintained is kept at a very low level. The inventory has been ordered just after receiving of
sales order from customers. The inventory is arriving quickly and the resulting sales order is
effectively completed by the organization. In this way inventory maintenance cost is reduced,
resulting in the profit increase.

Transportation is the third major logistics functions. Major logistic function also include the
transportation in which certain decisions about the transportation of goods are made in the light
of the interests of the organization. Transportation function is important because it affects the
delivery performance, pricing of product, and condition of the arrived goods etc. This would
ultimately affection the satisfaction of the customers. There are five different transportation
modes that can be adopted by the organization in the delivery of their products to the dealers,
warehouses and customers. These five modes of transportation are rail, truck, pipeline, air and
water.

The last major logistics functions are logistics information management. Companies manage
their supply chains through information. Channel partners often link up to share information and
make better joint logistics decisions. From a logistics perspective, flows of information, such as
customer transactions, billing, shipment and inventory levels, and even customer data, are
closely linked to channel performance. Companies need simple, accessible, fast, and accurate
processes for capturing, processing, and sharing channel information. Information can be share
and managed in many ways, but most sharing takes place through electronic data interchange
(EDI), the digital exchange of data between organizations, which primarily is transmitted via the
Internet.