logistics - 1) the subset of supply chain management that controls the forward and reverse movement, handling, and storage of goods between origin and distribution points. 2) the art and science of obtaining, producing, and distributing material and product in the proper place and in proper quantities., inventory - 1) those stocks or items used to support production (raw materials and work-in-process items), supporting activities (maintenance, repair, and operating supplies), and customer service (finished goods and spare parts) 2) all the money currently tied up in the system, forecasting - the business function that attempts to predict sales and use of products so they can be purchased or manufactured in appropriate quantities in advance., customer service - 1) The ability of a company to address the needs, inquiries, and requests of customers. 2) A measure of the delivery of a product to the customer at the time the customer specified., risk pooling - a method often associated with the management of inventory risk. Manufacturers and retailers that experience high variability in demand for their products can pool together common inventory components associated with a broad family of products to buffer the overall burden of having to deploy inventory for each discrete product., risk management - the identification, assessment, and prioritization of risks followed by coordinated and economical application of resources to minimize, monitor, and control the probability and/or impact of unfortunate events or to maximize the realization of opportunities., third-party logistics company - a company that manages all or part of another company’s product delivery operations., third-party registration system - using an outside party (rather than the buyer) to determine the adequacy of a seller’s product quality., fourth-party logistics - (1) often a separate entity formed by a joint venture or other long-term contract between a client and one or more partners; (2) an interface between the client and multiple logistics services providers; (3) ideally, all aspects of the client’s supply chain are managed by this organization, delivery reliability - a performance criterion that measures how consistently goods and services are delivered on, or before, the promised time, drop ship - To take the title of the product but not actually handle, stock, or deliver it (i.e., to have one supplier ship directly to another or to have a supplier ship directly to the buyer’s customer), mix forecast - prediction of the proportion of products that will be sold within a given product family, or the proportion of options offered within a product line., seasonality - a predictable repetitive pattern of demand measured within a year where demand grows and declines. These are calendar-related patterns that can appear annually, quarterly, monthly, weekly, daily and/or hourly., random variation - a fluctuation in data that is caused by uncertain or random occurrences., bias - a consistent deviation from the mean in one direction (high or low). A normal property of a good forecast is that it is not biased, mean absolute deviation (MAD) - the average of the absolute values of the deviations of observed values from some expected value. It can be calculated based on observations and the arithmetic mean of those observations,

Chapter 10: Logistics

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