Inventory (Chapter 7) is a crucial aspect of supply chain management that has a variety of definitions and focuses on functionality to be properly maintained. The carrying costs of inventory include capital, taxes, insurance, obsolescence and storage. When planning inventory it boils down to 2 very important questions: "when to order" and "how much to order"? Again, the Covid-19 pandemic has put a glaring spotlight on managing uncertainty which pairs up directly to inventory. For example, in the breadth of inventory, managing uncertainty encompasses demand uncertainty, performance cycle uncertainty, safety stock with combined uncertainty, estimating fill rate and dependent demand replenishment. Policies of inventory management refers to inventory control, reactive methods, planning methods and collaborative inventory replenishment. Inventory management practices include classification of the product/market, segment strategy definition and defining policies and parameters.

Transportation (Chapter 8) plays a major role in the overall effectiveness of the supply chain. Transport functionality depends on its participants to abide by regulations to get their products through a free market system. The modal structure of transportation includes rail, truck, water, pipeline and air. These five modes of transportation have characteristics and capabilities that this chapter will dissect, from time to cost. Specialized transportation services encompass package service, intermodal and non-operating intermediaries. The complex area of transportation economics and pricing breaks down in 6 ways: economy of distance, economy of weight, economy of density, other pricing factors, costing freight and pricing freight. Transportation management is essential to meeting deadlines and achieving goals which is made up of operational management, consolidation, negotiation, control, auditing and claim administration. Documentation is a vital part of transportation with regards to the bill of lading, freight bill and shipment manifest. From my 20+ years as a logistics manager I have seen many a shipment come back from the other side of the world because of improper documentation. Finally, the chapter will address product pricing and transportation with information on FOB pricing, delivered pricing and pickup allowances.

Discuss the differences between reactive and planning inventory logics. What are the advantages and risks associated with each? What are the implications of each?

Railroads have the largest percentage of intercity freight ton-miles, but motor carriers have the largest revenue. How do you explain this relationship?

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Reactive vs Planning Inventory Logics Reactive Inventory Logic Focus Responds to changes in demand after they occur Orders are placed based on recent ... View the full answer