LOGISTICS MANAGEMENT

A ASSIGNMENT REPORT

ON

“MODELS IN LOGISTICS MANAGEMENT”

In partial fulfillment of

Integrated Master of Business Administration

Submitted By-

Sandeep Khalkho

CUJ/I/2015/IMBA/29

Semester VII

Under the supervision of

Ms. Pushpanjali Jha

(Assistant Professor)

Dept. of Business Administration

Logistics Management

Definition:- Logistics management is a supply chain management component that is

used to meet customer demands through the planning, control and implementation of the
effective movement and storage of related information, goods and services from origin to
destination. Logistics management helps companies reduce expenses and enhance
customer service.

The logistics management process begins with raw material accumulation to the final
stage of delivering goods to the destination.

By adhering to customer needs and industry standards, logistics management facilitates

process strategy, planning and implementation.

In other word : Logistics management activities typically include inbound and outbound
transportation management, fleet management, warehousing, materials handling, order
fulfillment, logistics network design, inventory control, supply/demand planning and
management of third-party logistics services providers

Different Types of Logistics Management Models

 Forecasting Models

 Mathematical programming Models

o Location Models
o Allocation Models
o Distribution Networking Design Models

1. Forecasting Models

Forecasting models:- These models allows prediction of demand based on past data or
other parameters that are independently available. They enable better planning. Gives the
lead time necessary for response.

Forecasting is an attempt to determine in advance the most likely outcome of an

uncertain variable. Planning and controlling logistics systems need predictions for the
level of future economic activities because of the time lag in matching supply to demand.
Logistics requirements to be predicted include customer demand, raw material prices,
labor costs and lead times. Qualitative methods are mainly based on expert judgment or
on experimental approaches, although they can also make use of simple mathematical
tools to combine different forecasts.
Forecasting Methods
Qualitative forecasting techniques: An approach to forecasting that is based on intuitive
or judgmental evaluation. It is used generally when data are scarce, not available, or no
longer relevant. Common types of qualitative techniques include: personal insight, sales
force estimates, panel consensus, market research, visionary forecasting, and the Delphi
method. Examples include developing long-range projections and new product
introduction.

Quantitative forecasting technique

An approach to forecasting where historical demand data is used to project future

demand. Extrinsic and intrinsic techniques are typically used.

Graphical forecasting methods

The use of visual information to predict sales patterns typically involves plotting
information in a graphical form. It is relatively easy to convert a spreadsheet into a graph
that conveys the information visually. Trends and patterns of data are easier to spot, and
extrapolation of previous demand can be used to predict future demands.

Trend forecasting models

Methods for forecasting sales data when a definite upward or downward pattern exists.
Models include double exponential smoothing, regression, and triple smoothing.
 Mathematical programming Models

Introduction

Business leaders today are facing many challenges including cost, tax laws, skills,
material availability, and new market entry and others have driven organizations to
redesign and reconfigure their supply chains continually. As supply chains become
globalized the complexities to manage and control those globalized supply chains will
also increase and that usually results in inadequate existing experience and intuition.
Therefore, to overcome that inadequacy the use of mathematical models becomes
necessary.

Logistics networks configuration is such kind of problems concerning facility location,

production and distribution planning along the whole process of material flow.
Abundant research has been done in this field from modeling by considering different
scenarios to methods such as different heuristic methods. However, the models do not
consider the influence of the important postponement strategy on logistics networks in
the era of mass customization. Furthermore, the multi-commodity models till now do
not consider the influence of commonality among products. In this paper, a logistics
network model considering product commonality and postponement is formulated.
This model is expected to be used to analyze the impacts of commonality and
postponement strategies on location-allocation decisions in logistics network planning.

Allocation Models

Allocation models this models helps in optimally allocation. Commodities from sources
to destination in a multi source multi destination environment.

Logistics distribution center (LDC) connecting manufacturers with clients play an

important role in logistic network. So the aim of this paper is to build an allocation
model of LDC which is based on the demand of customers. In order to improve the
accuracy of demand forecasting, here the combinative forecasting model of Grey system
model and Markov chains model was employed to forecast the future development. Then
the LDC was constructed to minimize the total logistic cost of transportation,
distribution, management and so on. Finally, a real example of Hefei Mailing Co., LTD
is used to verify the precision of demand forecasting and the feasibility and advantage of
the built allocation model.
Location Models

This models helps in planning the optimal location of plants or warehouse, considering
the inbound and outbound transportation costs and infrastructure cost of the locations

In the environment of global economy, enterprises must configure and utilize worldwide
resources to keep the advantages of competition. How to source products from the most
appropriate manufacturing facility, how to keep the balance between inventory,
transportation and manufacturing costs, and how to match supply and demand under
uncertainty are concerned by each company, especially the multinational companies .It is
impossible to realize the strategic goal without a well developed and realizable logistics
system. High efficient international logistics system will become the core competence
for an enterprise to control cost, reach high-level customer service, and hence realize
global business successfully.
location-allocation problems, ranging from the so-called p-median problem to
incapacitated facility location problem and capacitated facility location problem, to the
versions considering dynamic and stochastic properties of the supply chain network
,multiple products, and/or multiple layers/echelons with or without intra-layer flows, to
some models integrating tactical and operational decisions in the logistics system, like
production decisions, inventory management, and routing, to some models considering
risk management, financial aspects, and international factors, etc.

Distribution Networking Design Models

These models are usually comprehensive in nature, deciding between a two, three or
even four stage distribution network, location of warehouse and break bulk points, and
sometimes even the transportation mode choice.

The distribution chain or channel represents the movement of a product or service from
the point of purchase to the time it is handed over to the final user/consumer. This may
entail a chain of intermediaries passing the product down the chain within the
organisation before it finally reaches the consumer or end-user. Or it could be direct from
the point of purchase to the end user. Each of the elements in these chains will have its
own specific needs, which the producer must take into account, along with those of the
all-important end user. Reliability of the distribution chain is critical.
 In the humanitarian context, distribution is viewed from three perspectives:

1. Movement of goods from the point of purchase or transfer of ownership (vendor to

humanitarian organisation) to the point of final use. This is common in sudden on-set
emergencies where goods are often taken straight to end user. The internal distribution
occurs at the point the commodity or goods are being handed over to the beneficiary;
2. Movement of goods from one location within the organization to another location within
the same organization. For example, from hub to hub, or hub to end user point; this is
common when resources are being mobilized to strategic locations for onward movement
to point of use as in the case of preparedness for an anticipated emergency; or,
3. The point at which the goods are handed over by the organization to beneficiaries or
partner organization. For example, WFP food distribution direct to beneficiaries or
partner agency conducting the distribution exercise.