SUPPLY CHAIN MANAGEMENT

Supply Chain Management



Supply Chain Management

Aero Marine Logistics Case

Logistics is an important component of supply chain management (Stank et al., 2005). Logistics management may be defined as “that part of Supply Chain Management that plans, implements, and controls the efficient, effective forward and reverse flow and storage of goods, services and related information between the point of origin and the point of consumption in order to meet customers' requirements. Both Stank et al. (2002) and Lin (2006) describe the importance of integrating the logistics processes of all supply chain partners to better serve the needs of ultimate customers. Rodrigues et al. (2005, p. 1) identify logistics as “one of the largest costs involved in international trade.” Christopher (2005) argues that the concept of cost employed in logistical decisions is narrow and ignores other costs like, inventory cost and obsolesce risk cost. Therefore, good Logistics management can online:

• Help ensure all activities are focused on customer service

• Help ensure the right items and resources are in the right place at the right time at the lowest overall cost

• Reduce the time taken to perform many activities

• Improve service and thus help to gain more business

• Reduce physical waste and wasted time

• Help to use resources more effectively

• Contribute significantly to improved safety by promoting tracking and control of all activities

• Increase profitability by reducing the costs of doing business

• Encourage integration and the development of supply chain teams

• Help to offer improved and wider services to your customers at lower costs to your business.

Question 1: 

Cost category

Monthly cost ($U.S.)

Annual cost ($U.S.)

Inbound transportation

20,000

240,000

Outbound  transportation

10,000

120,000

Maintenance

22,220

Energy

33,330

Total

415,550

Revenue category

Monthly revenue ($U.S.)

Annual revenue ($U.S.)

Mushroom sales

30,000

360,000

Backhaulsa

12,000

Total

372,000

a: based on 120 container shipments per year; 10% of return loads, or 12 containers, would generate revenues equal to the associated ...