Chapter 3
The Logistics/Supply Chain Product

Classification Products;

1.      Consumer product; directed to ultimate consumer

2.           Industrial products; directed to individuals or organizations

Product Characteristics;

1.       Weight-Bulk ratio

2.       Value-Weight ratio

3.       Substitutability

4.       Risk Characteristics

Product Packaging;

·         Facilitate storage and handling

·         Promote better utilization of transport equipment

·         Provide product protection

·         Promote the sale of the products

·         Change the product density

·         Facilitate the use of the products

·         Provide reuse value for the consumer

Product pricing;

·         Geographic Pricing Methods

·         F.O.B. Pricing

·         Zone Pricing

·         Single, or Uniform, Pricing

·         Freight Equalization Pricing

·         Basing Point Pricing

Quantity discount: Economic theory teaches that the more goods that are handled during a single transaction, the lower the costs on a per-unit basis.

Chapter 2
Logistics/Supply Chain Strategy and Planning

Level of Planning:

Decision Area	Strategic	Tactical	Operation
Facility location	No. size  and location of warehouse
Inventories	Stocking location, control policy	Safety stock level	Replenishment quantities and timing
Transportation	Mode selection	Seasonal equipment leasing	Routing, dispatching
Order processing	Order entry, transmittal, and processing system design		Processing order, filling back orders
Customers service	Setting standards	Priority rules for customer orders	Expediting deliveries
Warehousing	Handling equipment selection, layout design	Seasonal space choices and private space utilization	Order picking and restocking
Purchasing	Development of supplier buyers relationship	Contracting, vendor selection, forward buying	Order releasing and expediting supplies.

Major Planning:

1)      Customer service levels

2)      Facility location

3)      Inventory decision

4)      Transportation decision

When to Plan;

ü  Demand

ü  Customer service

ü  Product Characteristics

ü  Logistics Costs

ü  Pricing Policy

Guidelines for Strategy Formulation;

ü  Total Cost Concept

ü  Differentiated Distribution

ü  Mixed Strategy

ü  Postponement

ü  Consolidation

ü  Standardization

The Proper Channels Strategy

Supply Chain Type	Channel Design Characteristics
Efficient Supply chain Supply-to-Stock	ü  Economical production runs ü  Finished goods inventories ü  Economical buy quantities ü  Large shipment sizes ü  Batch order processing
Responsive supply chain Supply-to-Order	ü  Excess capacity ü  Quick changeover ü  Short lead time ü  Flexible processing ü  Premium transportation ü  Single order processing

Week 1
Chapter 1: Business Logistics Supply Chain- A Vital Subjects

*guys, attention please! we advice to all of you to remember logistics and supply chain definition until your last breath because this term are very extremely important for a logistic person.Start from now, after you see this information,hopefully you will keeping try to memorize them.In the final exam, usually question will asking you this type of definition and it will be useful to all of you to elaborate your sentence in essays!

Business Logistics Definition:

1. Logistics: Process that Plans, Implements, Controls the efficient and effective flow and storage of goods service and related information from the point of origin to the point of consumption in order to meet customer requirement
(Council of Logistics Management)*

2. Supply Chain Management (SCM): Is the integration of this activities through improve supply chain relationship to achieve a sustainable competitive advantage. (Handfield & Nichols)*

Opps! :O.. not yet finish guys..there have another important definition that also you have to memorize and always being asked by  Madam Nurdiyana  in our class! Its about:

The Logictics/Supply Chain Mission:

"Getting the right goods, or services to the right place at the right time, and in the desire condition at the lowest cost and highest return on investment"


download Business Logistics power point slide here*
chapter one

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