What is trade-offs in logistics?
The logistic trade-offs are the increase in revenue due the expansion of customer service or the increase in one cost being offset by the decrease of another.
Manufacturing and Logistics Trade-Offs When talking about logistics, certain costs of products vary; for example, some goods are more expensive than expected, some have low transportation costs, others have average storage costs, but the trade-off occurs when there comes a balance in the prices at the end.
What is a tradeoff in supply chain management?
For example, supply chain professionals are taught early about the trade-off between customer service levels and inventory costs for determining optimal inventory balances. Another example is the trade-off between extending payment terms to minimize working capital or taking early payment discounts.25-Jan-2016
On this point, there is in fact a well known trade-off between warehousing and transportation: as the number of sites is high, the cost of operating them is also high, but outbound transportation operating costs are low, because the different sites are close to the customers, and vice versa (Cooper and al.,1992 -cf.
What is an example of a trade-off?
In economics, a trade-off is defined as an "opportunity cost." For example, you might take a day off work to go to a concert, gaining the opportunity of seeing your favorite band, while losing a day's wages as the cost for that opportunity.
The main trade-off influencing distribution structure selection is “service level” versus “logistics costs”.
What is a trade-off in business?
In economics, the term trade-off is often expressed as an opportunity cost, which is the most preferred possible alternative. A trade-off involves a sacrifice that must be made to get a certain product or experience. A person gives up the opportunity to buy 'good B,' because they want to buy 'good A' instead.30-Apr-2021
What is a Cost Trade-off? It is the interrelationship among system variables in which a change in one variable affects other variables' costs. A cost reduction in one variable may increase costs for other variables, and vice versa.
What is total logistic system?
The Total Logistics Concept (TLC) is a commonly used term relating to the treatment of all logistic activities, among all partners, as one integrated system. In effect, all decisions at different levels are made based on logistics activities as a whole.
Total logistics costs consider the whole range of costs associated with logistics, including transport and warehousing costs and inventory carrying, administration, and order processing costs. Administration and order processing costs are relative to the total volume being handled.
Why are there trade-offs?
Trade-offs occur when activities are incompatible. Simply put, a trade-off means that more of one thing necessitates less of another. An airline can choose to serve meals—adding cost and slowing turnaround time at the gate—or it can choose not to, but it cannot do both without bearing major inefficiencies.
What is another word for trade-off?
Why is trade-off important?
The necessity of making trade-offs alters how we feel about the decisions we face; more important, it affects the level of satisfaction we experience from the decisions we ultimately make.
Depicts the relationships between system life-cycle cost and the system's performance requirements, design parameters, and delivery schedules. Trade-off analysis shows how cost varies as a function of system requirements (including Key Performance Parameters), major design parameters, and schedule.
What are the four different levels of trade-off?
Short-term, enduring, localized, individual tradeoffs are more easily perceived and estimated, and markets in many cases automatically calculate a monetary value or the market system can be simulated to provide a value.
Optimizing the logistics and supply chain often involves trade-offs.
How do you use trade-offs?
How to use Trade-off in a sentence
Trade-offs are the activities a brand chooses not to do, the activities that would be incompatible with the brand's vision and core values. Without trade-offs, there would be no choice and thus no need for strategy — Michael Porter.21-Jun-2019
What is risk trade-off?
Definition: Higher risk is associated with greater probability of higher return and lower risk with a greater probability of smaller return. This trade off which an investor faces between risk and return while considering investment decisions is called the risk return trade off.
A Project Trade-offs are: The result of a process where the team evaluates options for the project and decides which approach best meets the project's goals. We've all had situations where there were choices to be made and we had to decide which was the "best" or "right" choice for the situation.22-Jul-2017
What is the concept of logistics?
Logistics is the process of planning and executing the efficient transportation and storage of goods from the point of origin to the point of consumption. The goal of logistics is to meet customer requirements in a timely, cost-effective manner.
What is trade-offs in logistics?