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Dimensions of Logistics
Dimensions of Logistics
Dimensions of Logistics
Learning Objectives - After reading this
chapter, you should be able to do the following:
Understand the role and importance of
logistics in private and public organizations.
Discuss the impact of logistics on the
economy and how effective logistics
management contributes to the vitality of the
economy.
Understand the value-added roles of logistics
on both the macro and micro level.
Explain logistics systems from several
perspectives.
1998 10.1
1996 10.3
1995 10.4
1990 11.4
1985 12.3
1980 15.7
0 5 10 15 20
Materials Management
Marketing Logistics
Industrial Logistics
Distribution
inventory to balance
lead production times.
from damage.
Foreign & third party alternatives
Some logistics functions are being
outsourced.
Product
Promotion
Place
quantity discounts.
Volume relationships
Volumes sold will affect inventory requirements.
Channel competition
The more popular a product, the easier it is to
System 1 System 2
Cost Centers
Three Warehouses Five Warehouses
Transportation $ 850,000 $ 500,000
Inventory 1,500,000 2,000,000
Warehousing 600,000 1,000,000
Cost of Lost Sales 350,000 100,000
Total Cost $ 3,300,000 $ 3,600,000
Product Relationships
Product dollar value/logistics costs – see Figure 2-15.
Figure 2-17.
Spatial Relationships
Examine Figure 2-18.
Dimensions of Logistics