1) Answer the questions

1. What factors can speed up or slow down processing time? Give examples.

2. Do errors sometimes occur in the customer’s order request?

3. How do you understand the term ‘order batching’?

4. What is meant by ‘lot sizing’?

5. What is the difference between parallel and sequential processing?

2) Make word combinations.

1) transportation	a) sizing
2) order	b) processing
3) shipment	c) activities
4) ordered	d) considerations
5) stocks	e) in sequence
6) credit-checking	f) orders
7) to complete	g) paper
8) wrapping	h) procedures
9) stated	i) costs
10) high-priority	j) batching
11) design	k) consolidation
12) operating	l) priority
13) preferential	m) product
14) lot	n) on hand

3) Fill in the gaps with the following words (costs, on hand, order, batching, volume, than, small, receives, partially, product, shipment).

A customer ___________may be too large to be filled from the stock immediately___________. Rather___________waiting for the complete order, the customer__________ her order____________filled and has some of the ordered__________available sooner.

Much like order____________, orders may be held in order to crate an economical__________size. Consolidating several___________orders to build a larger shipping_________reduces transportation__________.

Glossary unit 3

Manual transmission	механическая коробка передач	When a man use his hands and physical strength to move the gears that transmit power from an automobile engine via the driveshaft to the live axle
Electronic transmission	автоматическая коробка передач	When electronic equipment moves the gears that transmit power from an automobile engine via the driveshaft to the live axle
Bar coding	штриховой код	A series of lines printed on products sold in a shop that can be read by a machine connected to a computer to give the price, keep a record of the sale etc.
Freight consolidation	комплектование грузов	Combining cargo into a solid mass
Split-order processing	заказ на покупку акций частями по разному курсу	An order to buy shares divided into separate parts
A backup source	резервный источник снабжения	An approval and supporting thing, place, activity etc that a company gets something from
A fixed replenishment schedule	фиксированный график пополнения запасов	incapable of being changed or moved list of times at which filling again by supplying what has been used up is planned to occur
To compress the order cycle time	сокращать цикл выполнения заказа	To make a process of completing an order more compact
Low-priority orders	низкоприоритетный заказ	Not important order
To create an economical shipment size	произвести экономичную по размерам партию товара	To make load of goods sent by sea, road, train or air using time and space carefully without wasting any
Transportation cost	расходы на транспортировку	The cost of transporting a good, especially in international trade

Unit 4 Transport Strategy

When the Chinese write the word “Crisis”, they do so in two characters- one meaning is “danger”, the other is “opportunity”.

Anonymous

Before you read

Discuss the following questions

1. Why does the logistician need a good understanding of total logistics’ costs?

2. How to create a transport strategy in your opinion?

3. Who is generally responsible for setting transport strategy?

Part 1

Transportation usually represents the most important single element in logistics costs for most firms. Freight movement has been observed to adsorb between one-third and two-thirds of total logistics costs. Thus, a logistician needs a good understanding of transportation matters. One needs only to contrast the economics of a “developed” nation with those of a developing one to see the part that transportation plays in creating a high level of economic activity. It is typical of the developing nation that production and consumption take place in close proximity; much of the labor force is engaged in agricultural production and a low proportion of total population lives in urban areas. With the advent of inexpensive and readily available transportation services, the entire structure of the economy changes towards that of developed nations. Large centers result from the migration of the population to urban centers, geographical areas. Limit production to a narrow range of products, and the economic standard of living for the average citizen usually rises.

Application

There are many markets, fresh fruits, vegetables, and other perishable products can be available at only certain times of the year due to seasonal growing patterns and lack of good growing conditions. Yet, many such products are in season at any time during the year somewhere in the world. Rapid shipment at reasonable prices places these perishable products in markets that would not otherwise have the products available. Bananas from South America are available in New York in January, live New England lobsters are served in Kansas City restaurants throughout the year, and Hawaiian orchids are plentiful in the eastern United States in April. An efficient and effective transportation system makes this possible.

Economies of Scale

Wider markets can result in lower production costs. With the greater volume pro­vided in these markets, more intense utilization can be made of production facilities and specialization of labor usually follows. In addition, inexpensive transportation also permits decoupling of markets and production sites. This provides a degree of freedom in selecting production sites so that production can be located where there is a geographic advantage.

Observation

Auto parts manufactured in such places as Taiwan, Indonesia, South Korea, and Mexico are used in assembly operations in the United States and are sold in the U.S. marketplace. Low labor costs and high-quality production are the attractions to man­ufacture in these foreign locations. However, without inexpensive and reliable trans­portation, the cost of placing parts throughout the United States would be too high to compete with domestic production.

Reduced Prices

Inexpensive transportation also contributes to reduced product prices. This occurs not only because of the increased competition in the marketplace but also because transportation is a component cost along with production, selling, and other distri­bution costs that make up the aggregate product cost. As transportation becomes more efficient, as well as offering improved performance, society benefits through a higher standard of living.

Crude oil can be obtained from domestic sources or it can be imported. Oil reserves in the Middle East are more accessible than they are domestically, and oil can be pro­duced at a lower cost. With the use of large supertankers, oil can be transported to markets around the world and sold at lower prices than locally produced crude oil, if it is available at all.

Exercises