Q.2) What is logistic performance cycle?

Or
Q.2) Explain various logistic performance cycle.

Q.1) Difference between 3PL and 4PL.

Or
Q.1) what is 3PL and 4PL logistics?

ANS) A third-party logistics provider provides outsourced logistics services to companies. These services
can make up part or sometimes all of their supply chain management functions, including:

 Inventory storage and management

 Picking and packing
 Freight forwarding
 Shipping/distribution
 Customs brokerage
 Contract management
 IT solutions
 Cross-docking

Advantages of 3PL

 Finding the right 3PL can save you time and money, through economies of scale (eg. Shipping
Rates)
 It works well with both local and international distribution, and you can get speedier delivery by
benefiting from their multiple storage locations
 It works well for a fast growing business with large order volumes
 You can still opt to control customer service and returns

Disadvantages of 3PL

 You have less control over your inventory and the customer experience
 Finding the right provider who you can trust and rely on can be time consuming
 3PL can be an expensive cost, especially when you only have small quantities of orders
 Generally, 3PL providers won’t handle perishable, hazardous, or flammable goods
  3PLs are suited to small-to-medium-sized businesses that want to take advantage of the
operational power of an external logistics company but still want some control over their supply
chain.

A fourth-party logistics: - A fourth-party logistics provider essentially takes third-party logistics a step
further by managing resources, technology, infrastructure, and even manage external 3PLs to design,
build and provide supply chain solutions for businesses.

4PL services typically encompass 3PL services as well as:

 Logistics strategy
 Analytics including transportation spend, analysis, capacity utilization, and carrier performance
 Freight sourcing strategies
 Network analysis and design
 Consultancy
 Business planning
 Change management
 Project management
 Control tower and network management services, coordinating a wide supplier base across
many modes and geographies
 Inventory planning and management
 Inbound, outbound and reverse logistics management

Advantages of 4PL

 Outsource the entire logistics segment of a business

 Take advantage of strategic advice in addition to operational support
 Disadvantages of 4PL
 Little control over logistics and fulfillment processes
 Likely to be expensive
 4PLs are a relatively new concept, but typically they’re sought out by medium to large sized
businesses that are seeking a complete logistics solution from both an operational and a
strategic perspective.

Q.2) Define logistics and write in detail about Integrated logistics.

Or
Q.2) What is logistics and also elaborate integrated logistics?

Definition: integrated logistics.

Is defined as “ the process of anticipating customer needs and wants; acquiring the capital, materials,
people, technologies and information necessary to meet those needs and wants; optimising the goods-
or-service-producing a network to fulfil customer requests; and utilizing the network to fulfil customer
request in a timely way.”
Logistic definition: the process of planning and organizing to make sure that resources are in the places
where they are needed, so that an activity or process happens effectively.

Q.3) Define EOQ and write assumptions of EOQ.

Or
Q.3) Write in detail about Economic Order Quantity.

ANS) EOQ: Economic order quantity (EOQ) is the ideal order quantity a company should purchase for its
inventory given a set cost of production, a certain demand rate, and other variables. This is done to
minimize inventory holding costs and order-related costs.

The Formula for Economic Order Quantity Is

EOQ=

Where:

Q = EOQ units

D = demand in units (typically on annual basis)

S = order cost (per purchase order)

H = holding costs (per unit, per year)

Assumption:

 That there is a known, constant stockholding cost

 That there is a known, constant ordering cost,
 That rates of demand are known,
 That there is a known constant price per unit
 That replenishment is made instantaneously, i.e. the whole batch is delivered at once.
 That costs to be used in EOQ calculations must be marginal costs. Fixed costs are excluded.

Q.4) Mission based costing V/S Activity Based Costing.

ANS) Mission based costing :- Mission” is a set of customer service goals to be achieved by the system
within the specific market/product context. A successful achievement of defined mission involves a large
input from various activity centres of the firm. Hence the logistics costing should be able to identify the
total costs of meeting a desired mission. This is referred as Mission Based Costing.

Essentially Mission Based Costing seeks to identity unique costs that are generated as a result of:-
Specific logistics activities aimed to achieve certain objectives in a specific customer/market. There is no
point in incurring additional costs if the additional benefits do not justify the same.

There are four stages in implementing an effective Mission Based Costing.

 Define the customer service segment This is required as all customers do not have the same
service requirements
 Identify factors that produce variations in the cost of service: for example – reducing the
frequency of delivery .will reduce the costs.
 Identify the specifies specific resources used to support customer segments.
 Attribute activity cost by customer type or segment.

Activity based costing :-

Activity-based costing (ABC) is a costing method that identifies activities in an organization and assigns
the cost of each activity to all products and services according to the actual consumption by each. This
model assigns more indirect costs (overhead) into direct costs compared to conventional costing.

 With ABC, a company can soundly estimate the cost elements of entire products, activities and
services, that may help inform a company's decision to either:

 Identify and eliminate those products and services that are unprofitable and lower the prices of
those that are overpriced (product and service portfolio aim)
 Or identify and eliminate production or service processes that are ineffective and allocate
processing concepts that lead to the very same product at a better yield (process re-engineering
aim)

Q.5) what is MRP and DRP?

Or
Q.5) Differentiate between MRP and DRP.

ANS) Materials resource planning (MRP) is a production system that pertains to inventory planning and
control. As MRP is used in the manufacturing industry, it is mainly concerned with the ordering of raw
materials through demand forecasting - meaning that this is more of a push control of inventory.
Demand forecasting is enabled throughout the operation and allows for an insight into how much
inventory is needed, which then enables a direct response to the system that orders the correct amount
of materials that will effectively fulfill the order.

MRP is a about being a step ahead of production and preparing for swift demand changes. Utilization of
accurate data and systematic resources will further enable the production facility to be able to further
optimize production and order materials in a waste minimized, more efficient manner.

DRP: - Distribution requirements planning

Distribution requirements planning (DRP) is the process in which goods are delivered in a more efficient
manner. These include considering the aspects of establishing a good, quantity of the good, and the
direct location that it is needed to arrive at in a given time. Distribution requirements planning will
benefit the operation as a whole through effective and cost-aware distribution, which allows for
production facilities to be able to focus elsewhere in the manufacturing operation.

The pull or push method is utilized by DRP distribution, with pull and push differing from each other. The
pull method includes goods shifting upward throughout the system and obtaining customer order
achievement. Although management controls the amount of goods available, distribution inventory
management is challenging because all orders are considered new to the supplying location as the
demand is flowing upward.

MRP and DRP Correlation

As MRP focuses more on a single location, DRP focuses more on the control of the materials among the
various locations. These two systems operate together and evaluate the supply chain in a variety of
ways:

 Modification of Orders
 Receipt Schedules
 Inventory Balances
 Transportation Times

These evaluations promote insight within the supply chain and allow for enhanced distribution and
efficient ordering of materials that aid production facilities through coming closer to the overall
efficiency point within the operation.

Q.6 what are the Basic Functions of a Warehousing?

Or
Q.6 Explain functions of Warehouse.

ANS) Basic function of a warehouse is movement of goods storage of goods, and information
management.

1. Storage of Goods: One of the traditional requirements of a warehouse has been for storing goods.
The warehouse provides the space required for such storage and it is one of the important functions of a
warehouse.

Warehouse performs two types of storage: planned and extended.

Planned Storage:
Storage required as planned to meet the regular customer demand is called panned storage, Every
inventory in received in the warehouse requires storage for a certain period of time. The duration of
storage many vary.

Extended Storage:

 Extended storage is an inventory in excess of normal warehouse operation. Some of the reasons
for extended storage requirements are seasonality in demand, erratic demand, product
conditioning, speculative purchases, discounts, etc.
 To meet the erratic or seasonality in demand an additional storage of goods in terms of safety
stocks could be required.
 Some products such as food items may be stored for conditioning purposes. E.g. ripening of
fruits.
 Sometimes a firm may buy bulk quantities to avail of the discounts that are available or to
purchase when the price is low. This is speculative purchases as the goods are bought at a
higher quantity due to lower price or due to expectation of higher price in the future.
 Sometimes due to promotional campaigns such as sales promotion, additional stock may be
required to be kept to meet the expected higher demand for the product.

2. Movement of Goods: Movement of goods consist of inbound activity (unloading of goods brought to
warehouse), transfer to storage (transferring the goods from the inbound area to the storage area),
order selecting (selecting the good in the storage as per order to be shipped and transferring it to
shipment area) and outbound activity (checking and loading the gods for shipment).

3. Information Management: Keeping a track of information regarding goods that have come into the
warehouse, stored and that are shipped out of the warehouse. Also any other information pertaining to
the warehouse is stored. The data captured by the information system in the warehouse is then passed
on to the higher management in order to take better decisions.

Secondary Functions of a Warehouse

4. Protection of goods- A warehouse provides protection to goods from loss or damage due to heat,
dust, wind and moisture, etc. It makes special arrangements for different products according to their
nature. It cuts down losses due to spoilage and wastage during storage.

5. Risk bearing – Warehouses take over the risks incidental to storage of goods. Once goods are handed
over to the warehouse-keeper for storage, the responsibility of, these goods passes on to the
warehouse-keeper. Thus, the risk of loss or damage to goods in storage is borne by the warehouse
keeper. Since it is bound to return the goods in good condition, the warehouse becomes responsible for
any loss, theft or damage etc., thus, it takes all precautions to prevent any mishap.

6. Financing- When goods are deposited in any Warehouse, the depositor gets a receipt, which acts as a
proof about the deposit of goods. The Warehouses can also issue a document in favour of the owner of
the goods, which is called warehouse-keeper’s warrant. This warrant is a document of title and can be
transferred by simple endorsement and delivery. So while the goods are in custody of the warehouse-
keeper, the businessmen can obtain loans from banks and other financial institutions keeping this
warrant as security. In some cases, warehouses also give advances of money to the depositors for a
short period keeping their goods as security.

7. Processing – Certain Commodities are not consumed in the form they are produced. Processing is
required to make them consumable. For example, paddy is polished, timber is seasoned, and fruits are
ripened, etc. Sometimes warehouses also undertake these activities on behalf of the owners.

8. Grading and branding- On request warehouses also perform the functions of grading and branding of
goods on behalf of the manufacturer, wholesaler or the importer of goods. It also provides facilities for
mixing, blending and packaging of goods for the convenience of handling and sale.

Q.7) what are the various functions of Inventory Management?

Or
Q.7) Explain the functions of Inventory management.

ANS) Inventory management is responsible for overseeing the products available in the inventory and
their outward and inward flow. The inventory management makes sure that there is not any unit in
excess nor in little amount in the storage so that the organization’s performance should not come under
jeopardy. This management makes sure that the inventory always hangs in the balance when it comes
to the units which a company produces and sells.

Functions of Inventory Management: The functions of the inventory management are as follows:

 The manager of the inventory has to take great care of time. He should be well aware that how
much time a unit will take in processing and reaching the inventory so that the material does
not get short in inventory.
 Inventory management is also fed with the cost of all the raw items and their subsequent costs
in finished form. Inventory management makes sure that the price of an item does not get too
high after including all the taxes. It has to be attentive to all costs from production to packaging
so that the prices should not get higher.
 Inventory management is also responsible for observing the availability of all raw materials
which to be used in completing all the orders. Managers have to make sure that all material is
available so that all orders could get complete in time.
 It is also a duty of an inventory manager that he keeps account of all raw materials and makes
order for their reach in time so that the processing operation does not come to halt.
  Inventory managementis also liable for keeping all records of the ready products which has to
be shipped. They have to be very clever in making calculation. The items for shipping should not
be shorter than demanded by the clients. If it happens, inventory managementcan wreck the
reputation of the organization.

Q.8) What are various Material handling Equipments?

OR
Q.8) Explain In detail about Material handling Equipments.

ANS) Material handling equipment is any tool used to aid in the movement, protection, storage, and
control of materials and products. The equipment used to do so can be broken down into four main
categories. Each category has a wide variety of useful equipment that makes safely moving heavy
materials or large volumes of materials easier.

1. Storage and Handling Equipment

The title of this equipment category is pretty self-explanatory. Storage equipment is used to hold
materials while they wait to be transported from the manufacturer or wholesaler to their final
destination. Having the right storage equipment can increase efficiency on the production floor and
maximize space utilization- two very important factors in any production environment.

Racks: such as pallet racks, drive-through or drive-in racks, push-back racks, and sliding racks

• Stacking frames: these are interlocking units that enable stacking of a load so crushing doesn’t occur

• Shelves

• Bins and drawers

• Mezzanines: elevated floor systems that are installed between the production floor and ceiling in
order to provide additional storage space. Most of these structures can be dismantled and moved with
ease.

Hand trucks– Also known as a dolly, or box cart. Hand trucks are l-shaped box-moving handcarts with
handles at one end, wheels at the base, and a ledge to set objects on.

• Pallet jacks– These are tools are the most basic form of a forklift and used to lift and move pallets
within a warehouse.

• Pallet trucks– Manual operated or powered industrial forklifts.

• Walkie stackers– A pedestrian walk-behind stacker with a mast for lifting pallets to heights.

• Platform trucks– These are similar to a two wheeled dolly, but with an extended deck.

• Order picker– An electric lift truck specifically designed for filling individual customer orders. This
requires piece-part picking rather than selecting full pallets or unit loads.
• Sideloader– Automated tool similar to a fork lift that loads and unloads from the side of the machine
rather than the front.

Conveyor belts

• Stackers– Similar to forklifts, stackers help to lift and stack heavy loads on the dock or in the
warehouse.

• Reclaimers– These are large machines used to recover bulk materials from a stockpile.

• Bucket elevators– Also known as a grain leg. These elevators haul flowable bulk materials vertically.

• Grain elevators– This type of equipment is used to store and move grain and other similar materials
throughout a production pathway.

• Hoppers– Hoppers are a container for bulk material such as grain, that tapers and discharges its
materials at the bottom.

Important functions of packaging are given below:

(i) Product Identification:

Packaging serves as an identification of the product. A product is packed in special sized, coloured and
shaped container for keeping its difference from the products of competitors. For example, the yellow
and black coloured pack of KODAK ROLL tells itself of its producer.

(ii) Product Protection:

The main function of packaging is to provide protection to the product from dirt, insects, dampness and
breakage. For example, the products like biscuit, jam, chips, etc., need to be protected from
environmental contact. That is why they are tightly packed.

(iii) Convenience: Packaging provides convenience in the carriage of the product from one place to
another, in stocking and in consuming. For example, the new pet bottles of COKE make the carriage and
stocking easier. Similarly, the pack of FROOTI provides convenience in its consumption.

(iv) Product Promotion:

Packaging simplifies the work of sales promotion. Packing material in the house reminds the consumers
constantly about the product. In this way, the packaging performs the role of a passive salesman.
Consequently, it increases the sales.

Paper is widely used because it is low cost, holds its shape, and is easily decorated. Commercially-
available paper is predominantly made from cellulose fibre from pulped wood, but can also be made
from other sources such as cotton, straw, sisal and hemp. All are recyclable.
  Paper tears easiest along the fibres
 Folding is easiest along the fibres
 Fold endurance is greatest across the fibres
 Stiffness is greatest when flexed across the fibres

Glass :- Glass is a popular and useful packaging material because it is:

 Inert
 Sterilisable
 Barrier to moisture and gas
 Pressure resistant to a degree
 Can be moulded into a variety of shapes
 Transparent making the product visible
 Glass is also highly recyclable

Metals :- Metal can be exploited to produce the following packaging characteristics:

 Strong and rigid

 Barrier to gas and moisture
 Pressure resistant
 Temperature and pressure resistant / tolerant
 Corrosion resistance via coatings
 Sterilisable
 Directly decorated or llabelled

Plastic: - Plastics can be used as single materials or in combination. Their properties vary considerably
but usually include:

 Lightweight
 Easily mouldable into almost limitless shapes
 Can produce rigid containers or flexible films
 Can be impact resistant
 Directly decorated or labelled
 Heat sealable.

Wood: - Mostly used for pallets and crates (heavy duty products). Some lidded or hinged boxes are
produced e.g. cigars, gifts, tea, cheese. High value spirits use wood and a few caps incorporate wood.

Q.9) Elaborate bullwhip effect with example.

OR
Q.9) What is Bullwhip effect explain with example?

ANS) The bullwhip effect is a supply chain phenomenon describing how small fluctuations in demand at
the retail level can cause progressively larger fluctuations in demand at the wholesale, distributor,
manufacturer and raw material supplier levels. The effect is named after the physics involved in cracking
a whip. When the person holding the whip snaps their wrist, the relatively small movement causes the
whip's wave patterns to increasingly amplify in a chain reaction.

In supply chain management, customers, suppliers, manufacturers and salespeople all have only partial
understanding of demand and direct control over only part of the supply chain, but each influences the
entire chain with their forecasting inaccuracies (ordering too much or too little). A change in any link
along the supply chain can have a profound effect on the rest of the supply chain. Given that, there are
many contributors and causes of the bullwhip effect in supply chain management.

Causes of the bullwhip effect

Companies must forecast customer demand based on insufficient information, and try to predict how
much product customers will actually want while accounting for the complex factors that enable that
amount to be delivered correctly and on time. At every stage of the supply chain there are possible
fluctuations and disruptions, which in turn influence the myriad supplier orders. Changes in customer
demand directly influence all the other factors along the chain, including inventory. However, the
bullwhip effect can occur even in relatively stable markets where the demand is essentially constant.

Forecasting demand has always been a difficult endeavor, and the increasing complexity of today's
global supply chains intensifies that difficulty, as does increasing consumer preference for Omni channel
and e-commerce. A few of the most common dependencies that can cause a bullwhip effect are:

 Lead-time issues such as manufacturing delays

 Less-than-optimal decisions made by supply chain stakeholders at any point along the chain, for
example, customer service or shipping
 A lack of communication and alignment between each link or stakeholder organization in the
supply chain
 Over- or under-reacting to demand expectations, i.e., ordering too many units or not enough
 Customer companies, often retailers, waiting until orders build up before placing orders with
their suppliers, a practice called order batching
 Discounts, cost changes and other price variations that disrupt regular buying patterns
 Inaccurate forecasts from overreliance on historical demand to predict future demand

A simplified example of the bullwhip effect

 The bullwhip effect often occurs when retailers become highly reactive to demand, and in turn,
amplify expectations around it, which causes a domino effect along the chain. Suppose, for
example, a retailer typically keeps 100 six-packs of one soda brand in stock. If it normally sells
20 six-packs a day, it would order that replacement amount from the distributor. But one day,
the retailer sells 70 six-packs and assumes customers will start buying more product, and
responds by ordering 100 six-packs to meet this higher forecasted demand.
 The distributor may then respond by ordering double, or 200 six-packs, from the manufacturer
to ensure they do not run out. The manufacturer then produces 250 six-packs to be on the safe
side.
 In the end, the increased demand has been amplified up the supply chain from to 100 six-packs
at the customer level to 250 at the manufacturer.
 This example is highly simplified but conveys the sense of exponentially increasing misalignment
as actions and reactions continue up and down the chain. The bullwhip effect also occurs as a
result of lowered demand at the customer level (which causes shortages when inaccurate) and
can be caused at other places along the chain.