In this chapter, the following content will be discussed: Introduction, definitions, the Rs of reverse logistics (RL), RL scope, reasons for RL (Operational & Strategic), evolution of RL in organisations, process for RL management, comparison of forward logistics Vs RL, advantages of RL, RL cases that enhanced competitive Adv, conclusion.
Logistics Management LSM 730 Lecture 15 Dr Khurrum S Mughal 1-1 Cost-Profit-Volume Analysis Cost-Profit-Volume Analysis Cost-Profit-Volume Analysis Since Bowling Green has the lowest Total Cost at the volume being produced, it will be chosen as the site of new facility Multiple Location Methods • • • • A more complex problem that most firms have It involves trading off the following costs: − Transportation inbound to and outbound from the facilities − Storage and handling costs − Inventory carrying costs − Production/purchase costs − Facility fixed costs Subject to: − Customer service constraints − Facility capacity restrictions Mathematical methods are popular for this type of problem that: − Search for the best combination of facilities to minimize costs − Do so within a reasonable computational time − Do not require enormous amounts of data for the analysis CR (2004) Prentice Hall, Inc 13-5 Location Cost Trade-Offs (Heuristic) Cost Total cost Warehouse fixed Inventory carrying and warehousing Production/purchase and order processing Inbound and outbound transportation CR (2004) Prentice Hall, Inc Number of warehouses 13-6 Examples of Practical COG Model Use • Location of truck maintenance terminals • Location of public facilities such as offices, and police and fire stations • Location of medical facilities • Location of most any facility where transportation cost (rather than inventory carrying cost and factor in location facility fixed cost) is the driving • As a suggestor of sites for further evaluation CR (2004) Prentice Hall, Inc 13-7 Mixed Integer Programming • - A method used commercially Has good problem scope Can be implemented on a PC - Running times may be long and memory requirements substantial Handles fixed costs well Nonlinear inventory costs are not well handled CR (2004) Prentice Hall, Inc 13-8 Transport Fundamentals When the Chinese write the word “crisis,” they so in two characters—one meaning danger, the other opportunity CR (2004) Prentice Hall, Inc 6-9 Location Strategy •Location decisions •The network planning process CR (2004) Prentice Hall, Inc 6-10 CONTROLLING Transport Strategy •Transport fundamentals •Transport decisions PLANNING Inventory Strategy •Forecasting •Inventory decisions •Purchasing and supply Customer scheduling decisions service goals •Storage fundamentals •The product •Storage decisions •Logistics service • Ord proc & info sys ORGANIZING Transport Fundamentals in Planning Triangle Importance of Effective Transportation System • • Comparison of developing Vs developed countries Increased Competition and access – • Economies of Scale – • Perishable Items Auto Parts Reduced Prices – Oil and Middle East CR (2004) Prentice Hall, Inc 13-11 Transport System Defined • Performance - Average transit time - Transit time variability - Loss and damage - Other factors including availability, capability, frequency of movement, and various less tangible services • Cost - Line haul - Terminal/local - Accessorial or CR (2004) Prentice Hall, Inc special charges 6-12 ...Cost-Profit-Volume Analysis Cost-Profit-Volume Analysis Cost-Profit-Volume Analysis Since Bowling Green has the lowest Total Cost at... Middle East CR (2004) Prentice Hall, Inc 1 3-1 1 Transport System Defined • Performance - Average transit time - Transit time variability - Loss and damage - Other factors including availability,... movement, and various less tangible services • Cost - Line haul - Terminal/local - Accessorial or CR (2004) Prentice Hall, Inc special charges 6-1 2