Course: GSCM550 – Logistics, Distribution and Warehousing
Assignment: Chapter 2 - Study Question – 1, 4 Chapter 3 – Study Question – 2, 4
Question 1: Illustrate a common trade-off that occurs between the work areas of logistics.
According to Bowersox (2012) “trade-offs between procurement, manufacturing, and logistics is to understand that the trade-off is between the cost and risk associated with anticipatory manufacturing and the loss of economy of scale resulting from introducing flexible procedures”.
The illustration of trade-off that occurs between the functional areas of logistics, the common trade-offs discussed in our textbook are:
Order processing – main importance to meet customer requirements…show more content… It all depends on the level or urgency and level of quantity for each customer. The primary service output is important to accommodate customer’s needs. For example, during holiday season, electronic companies are rushing to manufacture TV’s, and other electronic products for customers in busy season, while other companies like outdoor furniture which are required at later date like summer.
According to Bowersox, “Meeting customer requirements for service outputs has important implications for how supply chains are configured, what types of participating companies may be included to satisfy service requirements, and the costs that are incurred in the process”. The firms that differ in the level of each service output are those that are eliminating discrepancies to make room for what is supplied when are needed.