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1、Contemporary LogisticsTwelfth EditionChapter 7Demand Management, Order Management, and Customer ServiceContemporary LogisticsTwelfth Learning Objectives7.1 To understand the linkages between demand management, order management, and customer service7.2 To introduce you to demand forecasting models7.3

2、 To examine the order cycle and its four components7.4 To understand the four dimensions of customer service as they pertain to logistics7.5 To familiarize you with select managerial issues associated with customer service Learning Objectives7.1 To undDemand Management (1 of 7)Demand management can

3、be defined as “the creation across the supply chain and its markets of a coordinated flow of demand.”11John T. Mentzer, “A Telling Fortune,” Industrial Engineer, April 2006, 4247.Demand Management (1 of 7)DemaDemand Management (2 of 7)Demand (sales) forecastingRefers to an effort to project future d

4、emandIs a key component in demand managementIs helpful in make-to-stock situationsIs helpful in make-to-order situationsDemand Management (2 of 7)DemaDemand Management (3 of 7)Demand forecasting models Three basic types of demand forecasting models: JudgmentalTime seriesCause and effect (associative

5、)Demand Management (3 of 7)DemaDemand Management (4 of 7)Demand forecasting models Judgmental demand forecasting model: Involves using judgment or intuitionPreferred in situations where there is limited or no historical dataTechniques include surveys, the analog technique, and othersSurveys used to

6、learn about customer preferences and intentionsAn analog (similar item to that being forecasted) is used as the basis for demand historyDemand Management (4 of 7)DemaDemand Management (5 of 7)Demand forecasting models Time series forecasting model: Underlying assumption is that future demand is sole

7、ly dependent on past demandSome techniques include:Simple moving averagesWeighted moving averagesDemand Management (5 of 7)DemaTable 7.1: Forecast Example Using the Simple and Weighted Moving Average TechniquesTime period (1)Demand(2)Simple MovingAverageWeightingFactor (3)ProjectedDemand(4; = 2 3)We

8、ightedMoving AverageWeightingFactor (5)ProjectedDemand(6; = 2 5)Last month250.2562.5.40100Two months ago230.2557.5.3069Three months ago200.2550.2040Four months ago180.2545.1018Forecast215227Table 7.1: Forecast Example UsDemand Management (6 of 7)Demand forecasting models Cause-and-effect forecasting

9、 model Also referred to as associative forecastingAssumes that one or more factors are related to demand and that the relationship between cause and effect can be used to estimate future demandSome techniques include:Simple regressionMultiple regressionDemand Management (6 of 7)DemaDemand Management

10、 (7 of 7)Demand forecasting issues Selection of forecasting technique(s) depends on many factorsSelecting an inappropriate technique will reduce forecast accuracyForecast accuracy can have important logistical implicationsComputer forecasting software unable to completely eliminate forecast errorsDe

11、mand Management (7 of 7)DemaOrder Management (1 of 10)Order management refers to management of the various activities associated with the order cycleOrder cycle (replenishment cycle or lead time) refers to the time from when a customer places an order to when goods are receivedOrder to cash cycle re

12、fers to the length of time it takes an organization to receive payment for an orderSome organizations include order to cash cycle in their order management modelOrder Management (1 of 10)OrdeOrder Management (2 of 10) Four stages of the order cycle include:Order transmittalOrder processingOrder pick

13、ing and assemblyOrder deliveryOrder Management (2 of 10) FouOrder Management (3 of 10) Order transmittal Refers to the time from when the customer places an order until the seller receives the orderMethods of order transmittalIn personMailTelephoneFaxElectronicallyOrder Management (3 of 10) OrdOrder

14、 Management (4 of 10) Order processing Refers to the time from when the seller receives an order until an appropriate location (i.e., warehouse) is authorized to fill the orderOrder Management (4 of 10) OrdOrder Management (5 of 10) Order processing activities include:Checking for completeness and a

15、ccuracyChecking the buyers ability to purchaseOrder entry into the computer systemCrediting salesperson with the saleRecording the transactionDetermining inventory locationArranging for outbound transportationOrder Management (5 of 10) OrdFigure 7.1: Flowchart of Order Handling (Order Processing) Sy

16、stemFigure 7.1: Flowchart of OrderOrder Management (6 of 10)Order picking and assemblyIncludes all activities from when an appropriate location is authorized to fill the order until goods are loaded aboard an outbound carrierOrder Management (6 of 10)OrdeOrder Management (7 of 10)Order picking and a

17、ssemblyOften represents the best opportunity to improve the effectiveness and efficiency of an order cycleCan account for up to two-thirds of a facilitys operating cost and timeOrder Management (7 of 10)OrdeOrder Management (8 of 10)Order picking and assemblyExamples include:Handheld scannersRadio-f

18、requency identification (RFID)Voice-based order pickingPick-to-light technology Order Management (8 of 10)OrdeOrder Management (9 of 10)Order deliveryRefers to the time from when a transportation carrier picks up the shipment until it is received by the customerOrder Management (9 of 10)OrdeOrder Ma

19、nagement (10 of 10)Order deliveryThree key order delivery issues:Variety of options in terms of transit time are now available, such as delivery by 12 noon and delivery by 4:30 p.m.A number of shippers are emphasizing both elapsed transit time as well as transit time reliabilityTransportation carrie

20、rs are revamping their operations to provide faster transit times to customersOrder Management (10 of 10)OrdCustomer Service (1 of 4)Defined as “the ability of logistics management to satisfy users in terms of time, dependability, communication, and convenience.”2Customer service is much more diffic

21、ult for competitors to imitate than other marketing mix variables such as price and promotion2Roger A. Kerin, Steve W. Hartley, and William Rudelius, Marketing, 10th ed. (Boston, MA: McGraw-Hill/Irwin, 2011), Chapter 16.Customer Service (1 of 4)DefinCustomer Service (2 of 4)Four dimensions of custom

22、er service include:TimeDependabilityCommunicationConvenienceCustomer Service (2 of 4)Four Customer Service (3 of 4)TimeRefers to the period between successive events (e.g., order cycle)DependabilityRefers to the reliability of the service encounterConsists of three elements:Consistent order cycles S

23、afe deliveryComplete deliveryCustomer Service (3 of 4)TimeCustomer Service (4 of 4)CommunicationTo be effective, should be a two-way exchange between seller and customerGoal is to keep both parties informedRequires correct parties to be involved in the processConvenienceFocuses on the ease of doing

24、business with a sellerCustomer Service (4 of 4)CommuManaging Customer Service (1 of 2)Four specific customer service considerations include:Establishing customer service objectivesMeasuring customer serviceCustomer profitability analysis (CPA)Service failure and recoveryManaging Customer Service (1 oManaging Customer Service (2 of 2)Establishing customer service objectivesMe

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