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Chapter 1 An Overview of Logistics

This chapter provides an overview of logistics and its importance. It discusses the different types of economic utility that logistics provides, including possession, form, place, and time utility. It also outlines how technological advances and globalization have influenced logistics. The chapter describes the systems and total cost approaches to logistics and examines logistics' relationships with other business functions like finance, production, and marketing. It concludes with an overview of key logistics activities and careers.

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Laura Rubí Gómez Cavazos
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72 views4 pages

Chapter 1 An Overview of Logistics

This chapter provides an overview of logistics and its importance. It discusses the different types of economic utility that logistics provides, including possession, form, place, and time utility. It also outlines how technological advances and globalization have influenced logistics. The chapter describes the systems and total cost approaches to logistics and examines logistics' relationships with other business functions like finance, production, and marketing. It concludes with an overview of key logistics activities and careers.

Uploaded by

Laura Rubí Gómez Cavazos
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Universidad Autónoma de Nuevo León 

Facultad de Contaduría Pública y Administración 

 
 
 
 

RESUMEN
CAPÍTULO 1

 
Alumna: Gómez Cavazos Laura Rubí  
Matrícula: 2079274 
Grupo: 6DI               
Materia: Logística 
CHAPTER 1: AN OVERVIEW OF LOGISTICS

Logistics play an important role in a nation’s economic growth and development


Types of economic utility:

 Possession utility: value or usefulness, a customer being able to take possession of a


product, can be influenced by the payment terms associated with a product.
 Form utility: product that can be used by the customer, (add value to the customer).
Associated with production and manufacturing.
 Place utility: refers to having products available where they are needed by customers;
products are moved from points of lesser value to points of greater value.
 Time utility: which refers to having products available when they are needed by
customer
IMPORTANCE
Technological advances have profoundly influenced business management and, by extension,
business logistics:

 Removal of intermediaries
 Order picking process
 Shipment tracking
Globalization of Trade
Even if countries have traded with each other for thousands of years, globalization’s impact is
greater than ever before.
Systems and Total Cost Approaches to Logistics
Systems approach

 Indicates that a company’s objectives can be realized by recognizing mutual


independence of major functional areas of the firm.
 The goals and objectives of the major functional areas should be compatible with the
company’s goals and objectives.
Total cost approach

 Logistic managers use it to coordinate material management and physical distribution in


a cost-efficient manner.
 Requires an understanding of cost-trade offs (some costs increase, and others
decrease).

Logistical Relationships within the Firm


The system and total cost approaches to logistics require an understanding of logistics and its
relationships with other functional areas.
Finance
The finance department is often instrumental in approving capital budgeting decisions that affect
logistics, such as the acquisition of materials handling equipment and packaging equipment.
Production
One of the most common interfaces between production and logistics involves the length of
production runs. In many cases, the production people favor long production runs of individual
products because this allows the relevant fixed costs to be spread over more units, which
results in large amounts of inventory, and it is often the logistician’s responsibility to store and
track the inventory.
Marketing
Logistics strategies offer a unique way for a company to differentiate itself among competitors,
and logistics now offers an important route for many firms to create marketing superiority.
Interactions between logistics and marketing focuses on the marketing

 Place decisions
 Price decisions
 Product decisions
 Promotion decisions
Marketing channels
A set of institutions necessary to transfer the title to goods and to move goods from the point of
production to the point of and, as such, which consists of all the institutions and all the
marketing activities in the marketing process.

 Ownership Channel
 Negotiations Channel
 Financing Channel
 Promotions Channel
 Logistics Channel
Sorting Function
Bridges “the discrepancy between the assortment of goods and services generated by the
producer and the assortment demanded by the consumer”
Channel Intermediaries
Intermediaries make the entire system function better and should only be used when they add
value to the transaction.
Activities in the Logistical Channel
To successfully apply the systems and total cost approaches to logistics, it is essential to
understand the various logistics activities
Activities in the logistical channel:

 Customer Service  Warehousing management


 Demand forecasting  Order management
 Facility Location Decisions  Packaging
 International logistics  Procurement
 Inventory management  Reverse Logistics
 Materials Handling  Transportation management

Important factors in transportation management


Planning the logistical networks

 Analysis of the flow of goods along the supply chain


 Replenishment
 Transportation and tariff cost analysis
 Route planning
 Consolidation and bundling
 Optimization of transport handling
 Location planning
Logistics Careers
The logistics manager has a highly complex and challenging position, in part because the
logistician needs to be both.

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