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This is the art and science of obtaining, producing, and distributing material and product in the proper place and quantities.

Short Answer

Expert verified

Logistics is known as the art and science of obtaining, producing, and distributing material and products in the proper place and quantities.

Step by step solution

01

Definition of Logistics

Logisticsrefers to the overall management of the process of picking the order from the manufacturers and delivering it either to the distribution channel or to the end consumer.

During the whole process, the most important factor or step is the warehousing or the inventory storage. Warehousing is important because the finished goods or the raw materials are stored here for future use. The main aim of logistics is to deliver the product in a much shorter time to the consumer most effectively and efficiently.

02

Importance of logistics

For any business to reach globally, logistics play a very crucial role. The best and most common importanceof logistics is that it helps in the inventory control that helps the business to save their overall cost by keeping their goods and raw materials safe. Another importance can be it helps to increase the customer satisfaction level and to increase the turnover rate. Logistics also increase the demand for that particular product in the market because of the accurate delivery.

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Most popular questions from this chapter

What do you call the average total value of all items held in inventory for a firm, at cost?

Question:Bindley Corporation has a one-year contract to supply motors for all washing machines produced by Rinso Ltd. Rinso manufactures the washers at four locations around the country: New York, Fort Worth, San Diego, and Minneapolis. Plans call for the following numbers of washing machines to be produced at each location:

New York

50000

Fort Worth

70000

San Diego

60000

Minneapolis

80000

Bindley has three plants that can produce the motors. The plants and production capacities are

Boulder

100000

Macon

100000

Gary

150000

Due to varying production and transportation costs, the profit Bindley earns on every 1,000 units depends on where they were produced and where they were shipped. Thefollowing table gives the accounting department estimates of the dollar profit per unit. (Shipment will be made in lots of 1,000.)

Shipped to

Produced at

New York

Fort Worth

San Diego

Minneapolis

Boulder

7

11

8

13

Macon

20

17

12

10

Gary

8

18

13

16

Given profit maximization as a criterion, Bindley would like to determine how many motors should be produced at each plant and how many motors should be shipped from each plant to each destination.

a. Develop a transportation grid for this problem.

b. Find the optimal solution using Microsoft Excel.

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What are the roles of suppliers and customers in a lean system?

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