TRƯỜNG ĐẠI HỌC KINH TẾ TP.

HỒ CHÍ MINH

KHOA KINH DOANH QUỐC TẾ - MARKETING

GROUP DISCUSSION AND REVIEW

Subject: International Logistics Management

Group 5

Mai Thắng Lợi

Lê Trần Thảo Nguyên

Nguyễn Minh Hoàng Lâm

TP. HỒ CHÍ MINH - OCT 2021

 Question for Discussion & Review 
CHAPTER 1

1.1. Did it surprise you that logistics has such an important economic impact? Why or why
not?
Answer:
It is not surprising when I hear that. Logistics is an important activity regarding the facilitation of
the sale of practically all goods and services. Therefore, the logistics industry provides
significant macro contributions to the national economy by creating employment and creating
national income and foreign investment influx. There is no doubt to say that logistics can play an
important role in a nation’s economic growth and development. 
1.2. Distinguish between possession, form, time, and place utility.
Answer:
_ Possession utility refers to the value or usefulness that comes from a customer being able to
take possession of a product and can be influenced by the relevant payment terms. 
_ Form utility refers to a product's being in a form that can be used by the customer and be of
value to the customer.
_ Time utility refers to having products available when they are needed by customers
_ Place utility refers to having products available where they are needed by customers.

1.3. How does logistics contribute to time and place utility?

Answer:
Logistics contributes to time utility by recognizing that different products have different
sensitivities to time. For example, for products with a short shelf life, especially in the food
industry, time sensitivity is higher than for apparel or household goods. Late deliveries, for these
types of products, will cause serious loss to customers. 

As for place utility, logistics facilitates products being moved from points of lesser value to
points of greater value. The comparison of storing goods in a warehouse and putting them on
shelves is a valuable example for this part.

1.4. How can a particular logistics system be effective but not efficient?
Answer:
 Effectiveness can be understood as when an individual or company does their job well
and is rated as "efficient" from customers.
  Efficiency focuses on how well (or poorly) a company's resources are used to achieve
what the company promises it can do.
From the foregoing, it can be inferred that a particular logistics system can be effective but not
efficient when it does its work well of meeting customer needs but is not efficient in using
resources to achieve that result, leading to increased logistics costs. The use of transportation is
an example worth considering. Some companies often use premium or express transportation,
which increases shipping costs, to meet customer delivery requirements.
1.5. How do changing patterns of consumer behavior impact logistical decisions?
Answer:
The text discusses that the world is moving toward customized customer services, which doesn’t
not favor a “one size fits all” approach. Each customer may have their own preferences in terms
of packaging and delivery options. From this fact, companies will need to make logistical
decisions in a flexible manner that incorporate customer preferences. Due to changing family
roles, customers prefer the convenience to have the purchased items delivered to their home,
extended store hours, and ready-to-eat foods. All of these have significant impact on logistical
decisions, including packaging, transportation, and delivery.
1.6. How do you view the statement “logistics is not equivalent to supply chain
management”?
Answer: We agree with this statement.
Logistics management is that part of supply chain management that plans, implements, and
controls the efficient, effective forward and reverse flow and storage of goods, services, and
related information between the point of origin and the point of consumption to meet customers’
requirements.

In other words, the key point for now is that logistics is part of a bigger picture in the sense that
supply chain management focuses on coordination among business functions (such as
marketing, production, or finance) within and across organizations. The fact that logistics is
explicitly recognized as part of supply chain management means that logistics can affect how
well (or how poorly) an individual firm and its associated supply chain(s) can achieve goals and
objectives.

1.7. “Logistics function has a solely profit orientation.” Evaluate this statement.
Answer:
It is important to note the key role and impact of logistics in the company, on its sustainability,
competitiveness, and profitability, as well as in the economy of a country.
The recognition of the cost and service impact of logistics is an important step for companies.
The development and expansion of global competition and the increasingly international growth
of companies, with increasing foreign sourcing of raw materials, components, and labor, further
impacts the recognition of the importance of logistics. Domestic competition and saturated
markets, in particular, have led to the need for companies to become more competitive and thus
effective and efficient in all their operations, with logistics being no exception. Many discussions
on logistics refer to the competitive advantage which logistics efficiencies provide for a
company. Companies that successfully implement innovative strategies to better manage their
logistics requirements, for example, are better equipped to increase their competitive advantage
and corporate profitability and to become market leaders.
This statement is wrong. Logistics is applicable in not-for-profit situations as well. A community
food bank provides an example of the relevance of logistics to not-for-profit situations.
Humanitarian logistics (the process and systems involved in mobilizing people, resources, skills,
and knowledge to help people who have been affected by either a natural or man-made disaster)
is an emerging area of logistics in not-for-profit situations.
1.8. Differentiate between mass and tailored logistics.
Answer:
Mass logistics is a one-size-fits-all logistics approach, in which every customer gets the same
type and levels of logistics ser-vice—will result in some customers being overserved while
others are underserved. 

Tailored logistics is a kind of logistics approach, where groups of customers with similar
logistical needs and wants are provided with logistics services appropriate to these needs and
wants.
1.9. What are some ways in which technology has impacted logistics management?
Answer:

 Shipment Tracking Systems:  A shipment tracking system tailored for customers that
allows them to monitor and manage their shipments. It features shipment notifications
and messages, customizable reporting, and customer accounts with information specific
to the cargo destined to them. This helps to avoid some of the problems regarding
ordering and delivery in the past, that is when a customer has placed an order, received an
expected delivery date, and then it is forgotten unless they decide to make a call.

 Internet of Things (IoT) and Radio Frequency Identification (RFID): IoT is opening
up many opportunities for the supply chain, such as reducing costs and delays by
avoiding risks. Sensors are built into cabs, cargo ships, trains, etc., and connect to an
alarm system or dispatcher that is monitoring and tracking. These sensors process and
transmit the information to the crew who then gains insight into hidden risks and
knowledge. Although IoT isn’t an entirely new technology, it continues to impact the
future of logistics, allowing for a more accurate in-transit visibility and delivery of goods.
RFID technology, which has also been in use for a few years, is a popular labor-saving
way companies can track their inventory. A tag or sensor is placed on the product and
radio waves are sent out. The data is then received and processed by the company. The
superior speed of information delivery and data processing of RFIDs is more appealing to
businesses and the way technology is moving. Today, many companies are using RFID
tags in their distribution warehouses to monitor containers.
  Autonomous Trucks and Drones: Although it wasn’t completely driverless, with a
driver in the passenger seat to monitor the computer, it is a huge step in this breakthrough
technology and has the potential to increase efficiency in the delivery process. Amazon
has announced the future of packages being delivered right to doorstep by drones. Drones
deliveries are still a few years out due to regulatory measures and associated costs, but
the thought of not having to sit around during a four-hour time span waiting for a package
is pretty appealing.

 Enhanced GPS Accuracy: The advanced accuracy of GPS allows for increased
productivity and satisfied customers, by tracking trucks’ locations and improving hauls
through access to updated traffic data.

 Social Media: The power of social media is optimizing the logistics industry and
operations as a whole. These platforms are becoming the easiest and most efficient way
for companies to communicate with customers, conveying urgent information, industry
news, and customer responses quickly.

1.10. Why is logistics an imperative component in retailing?

Answer:
Retailing in the second decade of the twenty-first century is noticeably different than at the
beginning of the twenty-first century, and the differences exemplify the importance of effective
and efficient logistics for retailing success. Big retailers, such as Walmart and Carrefour, started
using logistics as a business differentiation component through best practices in the supply chain.
The development of omnichannel retailing (online, in-store, and mobile app) gives more avenues
for logistics in all forms to have more visibility and traceability in product movements.
1.11. What is the system's approach to problem solving? How is this concept applicable to
logistics management?
Answer:
The system's approach to problem solving suggests that a company’s objectives can be realized
by recognizing the mutual interdependence of its major functional areas, such as marketing,
production, finance, and logistics. As such, decisions made by one functional area can have
important implications for the other functional areas. With respect to logistics, the systems
approach suggests that one should recognize the mutual interdependence of the various activities
that constitute the logistics function. Thus, a transportation decision may impact inventory,
warehousing, and packaging, among others. 
1.12. Explain what is meant by the total cost approach to logistics.
Answer:
The total cost approach to logistics is built on the premise that all relevant activities in moving
and storing products should be considered as a whole (i.e., their total cost) and not individually.
Use of the total cost approach requires an understanding of cost trade-offs. In other words,
changes to one logistics activity cause some costs to increase and others to decrease. The key to
the total cost approach is that all relevant cost items are considered simultaneously when making
a decision. The objective is to find the approach with the lowest total cost that supports the
organization's customer service requirements.

1.13. Define what is meant by a cost trade-off. Do you believe that this concept is workable?
Why or why not?
Answer:
A cost trade-off means changes to one logistics activity cause some costs to increase and others
to decrease. Logistical cost trade-offs recognize that the costs of certain logistical activities
generally move in opposite directions. On this basis, it should be used by managers when making
any relevant logistics decisions. If they fail to do this, it may result in increasing costs that could
have been avoided if the situation was properly evaluated and the cost trade off approach was
used. One of the typical examples of this trade-off transportation costs decrease leading to an
increase in warehousing costs. 

1.14. What are several areas in which finance and logistics might interface?
Answer:
The finance department is often in charge of capital budgeting decisions that would affect
logistics, such as materials handling and packaging equipment. Another potential area of
finance/logistics interface is with respect to inventory; finance tends to view inventory from a
dollar perspective while logistics tends to be more concerned with the number of units of
inventory. This dichotomy is highlighted by the concept of depreciation which reduces the
monetary value of inventory by a certain amount per period of time - even though the actual
quantity of inventory may be unchanged.

1.15. Discuss the postponement concept as it relates to the production and logistics
interface.
Answer:
One interface involves the marked increase in product offerings; marketers like this increase
because it allows for more customer choice, but these additional choices create logistical
challenges in terms of identification, storage, and tracking. Another interface concerns the
amount of a particular item (SKU) to hold. Marketers prefer to carry higher quantities for
particular items because this reduces the likelihood of stockouts; however, from a logistics
perspective, higher quantities of inventory 
 (1) necessitate additional storage space and 
 (2) increase inventory carrying costs.

1.16. What is co-branding and how does it affect logistical decisions?

Answer:
Co-branding refers to an alliance that allows customers to purchase products from two or more
name-brand retailers at one store location. Foods and beverage outlets such as KFC, Lotteria,
Highlands, ... appearing in supermarkets or hotel lobbies can be seen as a reasonable example for
this definition.

Co-branding helps companies collaborate to deliver solutions to supply faster. From a logistical
perspective, a decision involves the distribution of products to specific retail locations. For
example, should each co-brander deliver its respective products to a specific location, or should
the co-brands jointly load vehicles to minimize the number of deliveries to a particular location?
While the former may result in higher delivery costs due to multiple deliveries, the latter requires
a higher degree of coordination between co-brands. 

1.17. Define what is meant by a landed cost and explain its relevance for pricing decisions.
Answer:
Landed cost may be understood as price of the product at its source plus transportation costs to
its destination:
 Landed cost = Price of the product at is source plus transportation costs to its destination
Landed costs help product or service providers have a holistic view of costs, prices, and profits.
Understanding landing costs is important for knowing how to price imported products. It also
gives your sales team an idea of how well they can reduce the price of a product while still
making a profit.

1.18. Briefly discuss the ownership, negotiations, financing, promotions, and logistics
channels.
Answer:
_ The ownership channel covers movement of the title to the goods; the goods themselves might
not be physically present or even exist.
_ The negotiations channel is the one in which buy and sell agreements are reached and can
include telephone, email, and electronic data interchange, among others.
_ The financing channel handles payment for goods and the company's credit, while the
promotions channel is concerned with promoting a new or an existing product.
_ Finally, the logistics channel handles the physical flow of the product.

1.19. Explain the importance of the sorting function in logistics.

Answer:
The sorting function is an important activity that helps bridge the discrepancy between the
assortment of goods and services generated by the producer and the assortment demanded by the
consumer. It has four main steps: sorting, accumulating, allocating, and assorting. These help
make the product stocks more homogenous, bring together similar stocks from different sources,
create smaller lots, and build assortments for resale, that is, to retail customers. 
1.20. Discuss five activities that might be part of a company’s logistics department.
Answer:
 Customer Service
There are many definitions of customer service, such as “keeping existing customers happy.”
Customer service involves making sure that the right person receives the right product at the
right place at the right time in the right condition and at the right cost. 

 Demand Forecasting
Demand forecasting refers to efforts to estimate product demand in a future time period. The
growing popularity of the supply chain concept has prompted increasing collaboration among
supply chain partners with respect to demand forecasting. Such collaboration can enhance
efficiency by reducing overall inventory levels in a supply chain. 
 Inventory Management
Inventory refers to stocks of goods that are maintained for a variety of purposes, such as for
resale to others, as well as to support manufacturing or assembling processes. When managing
inventory, logisticians need to simultaneously consider three relevant costs—the cost of carrying
(holding) product, the cost of ordering product, and the cost of being out of stock.

 Packaging
Packaging can have both a marketing (consumer packaging) and logistical (industrial packaging)
dimension. Industrial (protective) packaging refers to packaging that prepares a product for
storage and transit (e.g., boxes, crates). Packaging has important interfaces with the materials
handling and warehousing activities.

 Warehousing Management
Warehousing refers to places where inventory can be stored for a particular period of time. As
noted previously, important changes have occurred with respect to warehousing’s role in
contemporary logistics and supply chain systems.