i) What are the different types of decisions made in an organization?

a) Strategic decisions: This are the decisions that are concerned with whole
environment in which the firm operates, Strategic decisions are decisions about
an organization’s strategy. The objective of any strategy decision is to bring about
beneficial conditions within which action will occur. This are strategic decisions
that are set for the entire organization. They have long lasting effect throughout
the organization and involve many resources and is usually carried out by the
owner or board of directors. They can be risky in nature. E.g. Amazon making a
strategic decision to focus on electronic delivery of books through the Kindle
Reader and the Kindle Read App, which made them gained an unstoppable
competitive edge over Borders that was forced to close stores due to declining
traffic.

characteristics of strategic decisions:

i) They have long-term impact on the business

ii) They define the basis on which the firm competes or co-operates

b) Tactical decisions: This are medium term decisions, Tactics decisions are
usually changeable. Tactical decisions relate to the implementation of strategic
decisions. These decisions are directed towards developing divisional plans,
structuring workflows, establishing distribution channels, acquisition of resources
such as men, materials and money. They are taken at the middle level of
management. Tactical decisions are used to implement the strategies within an
organization over medium term. They are risky but less then strategic goals.

c) Operational decisions: are decisions made to manage day to day activities of a

business, organizations are faced with 100 decisions on a daily basis and are
more technical in nature, lesser resources are included in making this decision
and the risk involve is lesser. E.g. refilling the water cooler, fulfilling a customer’s
order.
ii) What are the tactical decisions about?

Tactical decisions: This are medium-term decisions usually spanning between six
months and one year. Managers use tactical decisions to outline what the
various parts of the organization must do for the organization to be successful at
various time of the one year. They are aimed at creating medium-term
schedules, and plans which is aimed at better utilizing the conformation
established in the strategic level decision-making, which also identifies medium-
term policies linked to production, material planning, distribution and storage.
Tactical decisions help in ensuring efficiency in production, distribution, and other
operations that add value to the product and to maintain a specified level of
service and product quality in a cost-effective way. It is usually used in the areas
of production, marketing, personnel, finance and plant facilities.

iii) What is the logistics strategy about?

A logistics strategy is the means of finding the most convenient and efficient
means of distributing goods and maintaining a high level of quality service.
A logistics strategy can also be defined as a set of strategic decisions, principles,
attitudes and driving forces that help you coordinate plans, goals and policies
between various partners across any supply chain management.

iv) What is the value-added strategy about?

This is to economically add value to a product by changing its current place, time,
and form of characteristics which makes its more preferred in the marketplace.
Supply chain is made up of all the activities, which adds worth to the final
product. It is the responsibility of an organization to add as much value to its
product, so as to make it more appealing to the customers. Organizations can
put even more value by providing time and place utility or providing innovative
features in the product.
v) What are the three factors to be considered when designing a logistics strategy?
a). Higher strategies: These strategies are used to set the organization’s goals
and the background for all logistics decisions, here the mission defines the total
aims, while the business and corporate strategies show how the objectives would
be achieved. Usually logistics strategies must always align with corporate
strategies.

b). The business environment: This involves all those factors that affect logistics,
and they usually non controllable.

These include:

 Customers – This includes their demands, attitudes, behaviour and

demographics.
 Market Conditions – This has to do with the size, stability and location.
 Technology – This has to do with the availability, increase and innovation rate;
 Economic Climate –This has to do with the rate of growth, inflation, and gross
domestic product.
 Legal Restraints – this are the trade restrictions, legal responsibility, and
employment laws.
 Competitors – This has to do with the number of competitors, ease of entry to the
market, and strengths;
 Shareholders – their aims for return on investments, purposes, and profit
required.
 Interest Groups – their objectives, powers, and amount of support.
 Social Conditions – customers’ lifestyles, varying demands, and noteworthy
trends.
 Political Conditions– This has to do with the stability of a country, the
governmental control and external relations.
c). Organization’s distinctive competence: The business environment is full of all
form of challenges. An organization can only succeed if it has a unique competence
that differentiate it from its competitors.

This unique competence arises from the assets of organizations, which include:

• Customers – their loyalty, demands, and relationships;

• Employees – skills, loyalty, and expertise;

• Finances – capital, cash flow, and debt;

• Organization – structure, flexibility, and relationships;

• Products – quality, innovations, and reputation;

• Facilities – capacity, reliability, and age;

• Technology – currently used, special types, and plans;

• Processes – structures, flexibility, and technology used;

• Marketing – experience and goodwill;

• Suppliers – service, partnerships, and flexibility; and

• Other Assets – innovation, knowledge, and patents.

In a nutshell, the unique competence of any business, shows a vivid picture of where
the business is now, the higher strategies show its aims for future while logistics
policy shows how to move from one place to the other.
vi) How do logistics play a strategic role in organizations?

• The strategic role of logistics is to structure a distinctive characteristic of how all

levels, of supply chain is carried out in such a way that the required services are
delivered accurately.
• To determine how the how the goals are attained and how well to improve on
any strategies that is not up to date.

vii) Outline the main areas that a logistics strategy emphasizes.

• Cost: All organizations are out to make profit, therefore they crave for low
costs, as this will result in a higher profit for the organization and also lower
prices for their customer.
• Customer service: Customer service goes beyond just selling of good or
services, it also includes the logistics aspect of it which involves managing of
stock levels, speed of response, delivery times, and other features of customer
service. Organizations that focus on the logistics policy for customer service,
tend to acquire competitive advantage over their competitors.
• Timing: The best logistics strategy is to under promise and over deliver to your
customers, therefore any logistics company must ensure a fast delivery to
customers.
• Quality: The logistics industry is a demanding sector that stresses the
importance of high-quality service to customer and continuous quality
improvement.
• Product flexibility: This has to do with an organization designing a product to
suit an individual specification.
• Volume flexibility: This is how fast an organization can quickly accommodate
large variations in production levels.
• Technology: In today’s business, the evolution of technology is changing how
the world does business, there are wide range of technologies used in Logistics
from communications, sorting parcels, tracking loads, spotting products,
recording stock activities etc.
 • Location: Customers usually want products to be delivered as near to them as
possible. One logistics scheme is to offer a service in the best feasible location,
such as bus stations in town centers. Fundamentally, organizations should do all
well, giving low cost, high-quality customer service, speedy delivery, elasticity,
using high technology, and so on. In practical terms, this is idealistic

viii)What is a lean strategy?

It means that the company charts its course to improve its profit by reducing
costs, or by becoming the highest quality or most responsive supplier in its
market and at the same time offer values to customers.
Its objectives are geared towards ensuring that for each operation less amount of
every resource –people, stock, space, equipment, time, and so on.

ix) What is the main purpose of logistics audit in organizations?

Logistics Audit is a way of complex and independent diagnostics of the corporate
logistics system functionality. Strategy, tactics, and shortage removing plan
determinative are the part of the logistics audit, and subsequent logistics system
improvement.
The purpose of logistics audit are as follows:

The main of logistics audit is like that of a SWOT analysis, which identifies an
organization’s, performance both internally and externally.

 Externally: is to study the external setting in wish the logistics business

functions. The external audit offers a study of the business setting in which
logistics function, this includes the observation regarding type of
customers, kinds of demand, established service levels, competitors,
locations, and their related operations, comparisons and benchmarks,
services obtainable, industry trends, economic conditions, geological and
political limitations, and any other applicable external information.
  Internally: is to review and evaluate the method in which things are done
within the organization and how well to improve on the strategies.

The strengths and weaknesses actually identify the internal functions of the
organization, this show its competence and weakness of the organization, while the
opportunities and threats show the external features, faced by the business
environment.

2)

 How does Charlotte currently organize her logistics? What do you think are her
aims and priorities? Charlotte logistics is currently organized by the use of a
website, where orders are collected and delivery is done through the use of a
postal services. Her aims and priorities is to increase sales times more than the
current one by introduce a mail order catalogue and increasing use of the
website.

 What would be the effect of the expansion on logistics? What problems would
Charlotte face and what options does she have to overcome them?
The effect of the expansion is that her sales would increase sales times more
than the current sales, the problems she would face might be that the new
expansion might not increase sales around ten times the current postal sales,
moving all the processing to an industrial estate 15 km away might come at a
higher cost, which can eat into the profit. To overcome this, a logistics audit
needs to be carried out on the company, a SWOT analysis of her business which
will give a detailed information of the company’s strength, weakness,
opportunities and threat. These will enable her to know if the expansion is a
viable one or not.
REFERENCE

C. Donald J. Waters, (2003), Global Logistics and Distribution Planning: Strategies for
Management.

Reza Zanjirani Farahani, Shabnam Rezapour, LalehKardar, (2011), Logistics Operations and
Management: Concepts and Models

Yuen Ha (Venus) Lun, Kee Hung Lai, Tai Chiu Edwin Cheng, (2010), Shipping and Logistics
Management

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