APPLICATION QUESTIONS:

Purpose: Assist students with understanding the logistics function of supply chain management. The three main functions of supply chain management are often described as a sequence of source, make, and delivery of products. The delivery function requires logistics management to control the commercial activity of transporting goods to customers. There are five major modes of transportation; railroads, motor carriers, pipelines, water transportation, and airways.

Assume that you are the supply chain manager for a producer of the following product lines. Identify the most suitable method(s) of transporting your product based on the criteria of relative cost, transit time, reliability, capability, and traceability. Write a brief justification for each your decisions.

Definitions:

• Relative Cost: The total amount of specific carrier charges to move the product from point of origin to the destination.
• Transit Time: The total time a carrier has possession of goods, including the time required for pickup and delivery, handling, and movement between the point of origin and the destination.
• Reliability: The consistency in which the carrier delivers goods on time in acceptable condition.
• Capability: The ability of the carrier to provide the appropriate equipment and conditions for moving specific kinds of goods.
• Accessibility: A carriers ability to move goods over a specific route or network.
• Traceability: The relative ease with which a shipment can be located and transferred.

Product 1 High Tech Computer Components (Best Buy)

• Identify 2 Suppliers (comparison):
• Identify Customer (retailer / consumer):
• Method of transportation (mode):
• Relative Cost (comparison):
• Transit Time (duration):
• Reliability (dependable):
• Capability (ability):
• Traceability (tracking):
• Justification:

Product 2 Dairy Products (Grocery Store)

• Supplier(s):
• Customer:
• Method of transportation :
• Relative Cost:
• Transit Time:
• Reliability:
• Capability:
• Traceability:
• Justification: