A Development Of Logistics Management Models For the Better Customer Service

Abstract

This article examines logistics management as the part of supply chain management that plans, controls and implements the movement and storage of goods, services and related information from origin to destination in order to reduce costs and improve customer service. Set against the Indian context, where logistics costs as a share of GDP are reported to be higher than in the USA because of inefficiencies in the logistics network, the paper reviews literature on mathematical and mixed-integer programming approaches to warehouse location, inbound consolidation and warehouse network redesign, as well as simulation tools for warehousing networks. It then outlines the elements of a logistics network model: facility data and geocoding, facility zones that aggregate customer demand, and shipping lanes generated between facilities as candidates for product flow. A model formulation is described in which the total flow of product on each link is split into groups of products sharing the same cycle time and freight rate, so that optimal flows and optimal shipments are determined together. The conclusion argues that successful firms choose an organisational model that supports their corporate strategy and targeted customer segments, and points to the practical application of the Centre of Gravity method, the PEST method, vehicle scheduling, the transportation method using Vogel's Approximation Method, and demand forecasting by linear regression analysis.

Abstract prepared by the editorial office from the full text of the article; the authors did not supply one.