Wednesday, 29 May 2013

Strategic Logistic Decision Making

Logistic Managers need to be involved in the three strategic level decisions which includes:

·         Make to order verses make to stock
·         Push verses pull inventory deployment
·         Inventory centralisation verses decentralisation.

Each of these is required when managing both domestic and international accounts. It is up to the manager to make the choices that will be able to cope with multiple issues such as customer service, managing costs and dealing with uncertainty.

Some firms will build to order in a way to reduce the investment that is required on inventory where as others function by having the stock ready to be dispatched, buying the amount that has been established through the sales forecast.

Strategic logistic decisions revolve around the product, operational and demand variables and the inventory turnover. Therefore measuring warehouse performance operations and having accurate inventory management systems and sales forecasts are essential.

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