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Chapter (2) Logistics and supply cain 1- Did it surprise you that logistics can be such an important component in a countrys economic system? Why or why not?
It didnt surprise me that logistics can be an important component in a countrys economic system; logistics tends to have significant economic impacts. From a macroeconomic perspective theres a relation between logistics costs and GDP. Although theres absolute and relative logistics costs in relation to GDP vary from country to country. Logistics is most definitely an important component in any countrys economy. Logistics can also play an important role in a nations economic growth and development. Logistics, particularly improvements in transportation efficiency, played a key role in the explosive growth of Irelands economy in the mid- and late 1990s.

2- Distinguish between possession, form, time, and place utility.

Economic utility: is the value or usefulness of a product in fulfilling customer needs or wants. the four general types of economic utility are possession, form, time and place. 1-possession utility refers to the value or usefulness that comes from a customer being able to take possession of a product. It can be influenced by the payment terms associated with a product. Example credit and debit cards( facilitate possession utility by allowing the customer to purchase products without having to produce cash. 2-form utility refers to products being in a form that can be used by the customer and is value to the customer. its associated with production and manufacturing. Example a soft drink company may produce thousands of cases of a certain type of soft drink( diet cola).

3-place utility refers to having products available where they are needed by customers. Example place utility is increased by moving the soda from a point of lesser value(stored cola in a warehouse) to a point of greater value(on a supermarket shelf). 4-time utility refers to having products available when they are needed by customers. its important to recognize that different products have different sensitivities to time.

According to CSCMP, Logistics is that (1) part of supply

chain management that (2) plans, implements and controls the (3)efficient, effective forward and reverse flow and storage of goods, services and(4) related information between the point of origin and the point of consumption in order(5)to meet customers requirements.

Q3: How can a particular logistics system be effective but not efficient?
The logistics system can be effective but not efficient when company want to achieve what it promises even itll cost here more costs. For example when Amazon company want to deliver a book on a specific time and the book what the customer need (effective) but the cost to deliver the book to the customer was high to the company(not efficient) all what the company want is to deliver the book what the customer need and on time whatever itll cost the company more money.

Q4: Explain the significance of the fact that the purpose of logistics is to meet customer requirements.
The purpose of logistics is to meet customer requirement, its v.important for 2 reasons:1- Logistics strategies and activities should be based on customer wants and needs rather than the wants, needs and capabilities of other parties. Although a customer focus might seem like the proverbial no-brainer, one implication of such a focus is that companies actually have to communicate with their customers to learn about their needs and wants.

2- The notion that because different customers have different logistical needs and wants a one size fits all logistics approach (mass logistics)- in which every customer gets the same type and levels of logistics service- will result in some customers being over served while others are underserved. Also companies should consider (tailored logistics approach) in which groups of customers with similar logistical needs and wants are provided with logistics service appropriate to these needs and wants.

5- Discuss three reasons for why logistics has become more important since 1980.
1- A reduction in economic regulation. 2- Changes in consumer behavior. 3- Technological advances. 4- The growing power of retailers. 5- Globalization of trade. 1- A reduction in economic regulation: The government controls of carriers rates & fares, entry& exit, mergers & acquisitions was very tuff in U.S. in the transportation industry the price competition was nonexistent and customers were much forced to accept any service the carriers choose to provide, this meant that logistics managers had little control over one of the important components in logistics system which is transportation cost. The reduction in economic regulation in U.S. allowed individual carriers flexibility in pricing and service. This flexibility was very important to logistics for two reasons: First: the companies could specify different service levels and prices could be adjusted accordingly (tailored logistics approach). Second: the increased pricing flexibility allowed large buyers of transportation services to reduce their transportation costs by leveraging large amounts of freight with limited number of carriers. * The reduction in economic regulation of transportation is a primary Reason for reduction in the cost of freight transportation.

2- Changes in consumer behavior: There are many examples of it as: Market demassification: theres one way to address it through mass customization (refers to the ability of the company to deliver highly customized products and services that are designed to meet the needs and wants of individual segments or customers. Changing family rules: as extended store hours, home delivery of purchased items and ready to eat ready to cook foods. Rising customer expectations: means that a satisfactory level of performance in the past might not be considered as so today. 3- Technological advances: From logistics perspective the most important technological advances have involved computer hardware and software in the management of logistics. It allowed logistics to make faster, more informed and more accurate decisions with customer service, transportation, inventory management. Although internet can be used for many logistical activities, research suggests the heaviest use of the internet involves purchasing of procurement and transportation. 4- The growing power of retailers: Power retailers are characterized by large market share and low prices, such as Wal- Mart. 5- Globalization of trade: Theres many factors have affected on the growth of global trade such as rising standards of living. We should recognize that the international logistics is mush more challenging and costly than domestic logistics.

6- Distinguish between inbound logistics, materials management and physical distribution.

Inbound logistics: movement and storage of materials into a firm. Materials management: movement and storage of materials and components within a firm. Physical distribution: storage of finished product and movement to the customer. Note: Logistics managers use the total cost approach to coordinate inbound logistics, materials management and physical distribution in a cost- efficient manner.

7- What is the system approach to problem solving? How is this concept applicable to logistics management?
the system approach: indicates that the companys objectives can be realized by recognizing the mutual interdependence of the major functional areas of the firm( marketing, production, finance and logistics). First implication of the systems approach is that the goals and objectives of the major functional areas (marketing, production, finance and logistics) should be compatible with the companys goals and objectives. This means that one logistics system doesnt fit all companies because goals and objectives vary from company to another. Second implication is that decisions made by one functional area should consider the potential implications on other functional areas.

8- What is meant by a cost trade- off, do you believe that this concept is workable? Why or why not?
Changes to one logistics activity cause some costs to increase and others to decrease.

9- What are several areas in which finance and logistics might interface?
The finance staff, which is concerned with predicting future cash flows, is dependent on logistics for information concerning the status of finished products. The finance department is useful in approving capital budgeting decisions that affect logistics, such as the acquisition of materials handling equipment and packaging equipment. Inventory is another area of interest for finance managers, because in financial terms inventory is recorded as an asset.

10Discuss each of the four basic aspects (4Ps) of the marketing mix and how each interface with logistics?
1-place: is the most important component of marketing mix. Logistics decisions concern the most effective way to move and store the product from where its produced to where its sold. From marketing prospective, its involving new strategies to get new customers. Theres a concept called co- branding, which refers to one location where customers can purchase products from two or more name- brand retailer. 2-price: logistics managers play an important role in product pricing. They must be consulted to determine the trade-offs between costs and customer service. They can also help formulate the firms quantity discount pricing policies. 3-product: product design has important implications for logistical effectiveness and efficiency. Its interface with logistics in: The marked increase in product offerings, which allows for more customer choice, creates logistical challenges in terms of identifications, storage and tracking. The amount of particular SKUs to hold. 4-promotion: One important situation is when a company is running pricing campaigns that lower the price of certain items.

**The interface activities between logistics & marketing: Customer service standards. Pricing. Packaging. Retail location.

11-why do marketers tend to prefer FOB destination pricing

rather than FOB origin pricing? There are two methods to control the transportation costs: FOB destination pricing: the seller tell the purchaser a price that includes both the price of the product and the transportation cost to the purchasers receiving dock. # Marketers prefers this method because of three reasons: 1-it enables a company to expand the geographic area to which its product is sold. 2-each purchaser has the same landed costs, its much easier for a company to apply a uniform retail price on a regional or national basis. 3-product distribution is managed by the seller, who can control the logistics network. FOB origin pricing: doesnt include any transportation costs to the purchaser. # Marketers doesnt prefer this method because its very difficult to adopt uniform retail prices on a regional or national basis.

12-what are several ways in which logistics and production might interface?
The most common interface between them involves the length of production runs (the production people favor long production runs of individual products because it allows the relevant fixed costs to be spread over more units). Interface activities: Product scheduling. Plant location. Purchasing.

13-activities in the logistical activities:-

Customer service: it means keeping customers happy. customer service involves making sure that the right person receives the right product at the right place at the right time at the right cost. Facility location decision: the success of retail store depends on main factor which is location. And it can say that the success of logistics system depend on location of warehousing and production facilities. Industrial packaging: marketing(consumer packaging) and logistics(industrial packaging- that refers to prepares the product for storage and transit). Inventory management: when managing the inventory, the logisticians need to consider three relevant costs:1- The cost of carrying the product. 2- The cost of ordering product. 3- The cost of being out the stock. Order management: refers to management of activities that take place between the time a customer make an order and the time he received the product. Procurement: refers to raw materials, component parts and supplies bought from outside the company to support a company operation. Warehousing management: refers to places where inventory can be stored for a specific period of time.

Marketing channels:
1- The ownership channel: covers movement of the title to the goods. 2- The negotiations channel: is the one which buy and sell agreements are reached. 3- The financing channel: handles payment for goods. 4- The promotions channel: is concerned with promoting a new or an existing product.