Discuss the concept of stockout costs. How can a stockout cost be calculated?
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How can warehouses control their energy usage in terms of design, lighting, and
roofing considerations?
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Discuss some of the basic functions performed by the bill of lading.
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How do open skies agreements differ from bilateral agreements?
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How can inventory flow diagrams be useful to a logistics manager?
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Discuss how a transportation manager might take advantage of the trade-offs between
price and service.
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What are ordering costs, and what is the trade-off between inventory carrying costs and
ordering costs?
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How important, in fact, are the transport costs for the initial shipment of 25 buses?
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Describe some of the key issues associated with measuring customer service.
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If the JIT system is adopted, are there safety stocks of any item that should be
maintained? If so, which ones, and how much?
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Discuss the trade-offs associated with order-picking versus stock-replenishing
functions.
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The Logistics Uncertainty Index has been established to identify uncertainty sources
that can affect the risk exposure for logistics activities.
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The Brazilian buyer wants the buses delivered at Santos. Weiss looks up the
International Chamber of Commerce’s Incoterms and finds three categories of
“delivered” at a receiving port. They are:
DAT (Delivered at Terminal). In this type of transaction, the seller clears the goods for
export and bears all risks and costs associated with delivering the goods and unloading
them at the terminal at the named port or place of destination. The buyer is responsible
for all costs and risks from this point forward including clearing the goods for import at
the named country of destination.
DAP (Delivered at Place). The seller clears the goods for export and bears all risks and
costs associated with delivering goods to the named place of destination not unloaded.
The buyer is responsible for all costs and risks associated with unloading the goods and
clearing customs to import goods into the named country of destination.
DDP (Delivered Duty Paid). The seller bears all risks and costs associated with
delivering the goods to the named place of destination ready for unloading and clearing
for import.
How should he choose? Why?
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What are some common logistics measures in transportation, warehousing, and
inventory management?
Answer:
Temporarily, ignore your work on Questions 2, 3, and 4. Low’s luck at the race track is
over; he now must borrow money to finance his inventory of nails. Looking at the
situation outlined in Question 1, assume that the wholesale cost of nails is $40 per keg
and that Low must pay interest at the rate of 1.5% per month on the unsold inventory.
What is his new EOQ?
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Assume that Fosdick decides that the practice of free lunches from the open cases of
goods must be stopped. Develop and present arguments he should give in a meeting
with a union shop steward.
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