| Facility Location |
| Location decisions are a basic determinant of profitability in international logistics. Decisions on where to manufacture, to assemble, to store, to transship and to consolidate can make the difference between profit and loss. Because of international differences in basic factor costs and because of exchange rate movements, location decisions are very important. Also, these decisions involve substantial involvement in fixed assets in the form of facilities and equipment. Location decisions, therefore, can have a continuing impact over time on the company’s financial and competitive position. As movement towards global manufacturing increases, organizations should consider location decisions through total cost analysis which includes activity related costs such as manufacturing, transportation and handling as well as inventory holding costs, tariffs, and taxes. Source: Christopher, M. (1998). Logistics and Supply Chain Management: Strategies for reducing cost and improving service, (2nd Ed.). New York: Prentice Hall. top |
| Forecasting |
| The business function that attempts to predict sales and use of products so they can be purchased or manufactured in appropriate quantities in advance. Source: http://www.apics.org/ (10th ed.) top |
| Forecast Error |
| The difference between actual demand and forecast demand, stated as an absolute value or as a percentage. E.g., average forecast error, forecast accuracy, mean absolute deviation, tracking signal. There are three ways to accommodate forecasting errors: One is to try to reduce the error through better forecasting. The second is to build more visibility and flexibility into the supply chain. And the third is to reduce the lead time over which forecasts are required. Source: http://www.apics.org/ (10th ed.) top |
| Forecasting Methods |
Qualitative forecasting techniques |
| Forecast Sharing |
| A supply partnership between a buyer and supplier is based on mutual interdependency and respect and calls for information sharing between the involved parties. By sharing its demand forecast with the supplier, the buyer benefits in two ways: 1) the partner becomes familiar with the buyer’s needs, and 2) the buyer develops a dependable supply source. Forecast sharing allows the supplier to plan for and schedule production efficiently. Source: Dobler, D.W., & Burt, D.N. (1996). Purchasing and supply management. (6th ed.). New York: McGraw Hill. top |