Archive for March, 2010

What is the relationship between price, value and costs?

March 11, 2010

Price, value and costs are not three isolated terms. There is an relationship between this three definitions.

Price is the amount of money paid for a product or service, or the sum of the values that consumers exchange for the benefits of having or using the product or service.

Cost is what we pay for what we have bought over time. In other words, buy a cheap car and therefore you will have bigger service bills and inconvenience in the next years. You have a higher cost over time than the lower price you paid.

When you start a survey and ask consumers for their demands, what do you think will they answer you? Firstly, low price for the product or service, but is this the true need? No, what consumers really expect are low costs.

Therefore, it seems that, we only need to question prospects better on what they really want and define for them in terms of our product or service the difference. What we are talking about here is value to the customer. And value is always ‘perceived value. Every prospect interprets value in his own terms.

Customer don’t want a cheap product or service, they want value. They don’t really want things that rust, break, are inconvenient or difficult to understand. People want products and services which helps them to make their life easier, less complicated, less stressful, happier and more fun.

If a product or service satisfies this demands from the people than the price of the product will not be the most important aspect for the customer.

Sources:

http://ezinearticles.com/?The-Price,-Cost-Value-Relationship&id=321066

http://www.cval.com/glossary.htm

What are the reasons for a fast growing world trade since 1950?

March 8, 2010

Exports of manufactures grew rapidly since 1950. In the year 2010 they are more than 80 times higher than 60 years ago.

The world trade has grown more than the world’s GDP in the last six decades. The gross domestic product (GDP) is a basic measure of a country’s overall economic output. GDP is the market value of all finished goods and services made within the borders of a country in one year.

Which factors influenced this steady, long-term growth?

There are many factors which influenced this rapid, massive increase in growth as a whole. It is possible to divide the massive changes in three main groups, to get an easier overview.

These groups are:

  • Decrease in transportation costs
  • The productivity of companies is improving continuously
  • Higher living standards in emerging economies

Decrease in transportation costs: There are many factors which contributes to keep the costs of transportation low. One of this factor is the handling of information, IT- Systems were introduced and therefore it is possible to conduct a work order very quickly. Through the last six decades the means of transport were able to transport bigger loads, because ships and trucks for example got bigger. Another important point which contributes to keep the transportation costs down is the UNIT Load. Standard sized boxes and goods which designed uniformly contributes to save transport spaces.

Productivity of companies is improving continuously: Nowadays it is absolutely necessary in firms to work efficient and save costs. Automation of the production can contributes to save costs in the process of production and helps to avoid human errors. Production concepts like “Just in time” or “Just in sequence” systems were introduced in the companies to handle the production process in a smart way.

Higher living standards in emerging economies: A lot of jobs from industrial countries move around to emerging countries like China or India. Therefore a lot of people in these states can find a job and earn money. This fact allows them to get a higher standard of living. They can spend their money on consumer goods.

Source: Logistic lecture of the 27th of March

Basics of logistics

March 8, 2010

Hello to everybody,

this is my blog concerning the topic “Logistics”.

Source: http://www.packandtrackltd.co.uk/images/Logistics/logistics.jpg

  • Definition/Classification of logistic

Logistic copes with the planning and control of material flows and related information in organizations in the public and also in the private sectors. The mission of logistic is to get the right materials to the right place at the right time, while optimizing a given performance measure (e.g. minimizing operation costs) and satisfying a given set of constraints (e.g. budget).

In the military context , logistics is concerned with the supply of troops with food, armaments and equipment, as well as the transport of troops themselves. The historical leaders Hannibal Barca, Alexander the Great, and the Duke of Wellington are considered to have been logistical geniuses.

In civil organizations, logistic topics are encountered in firms producing and distributing physical goods. The main issue is to decide how and when raw materials, semi-finished and finished goods should be acquired, moved and stored.

Logistics=Supply+Materials management+Distribution

  • Importance of logistic

To consider logistics in the context of business and the economy is absolutely necessary. Logistic is an important activity making extensive use of the human and material resources that affect a national economy.

The importance of the logistic sector is represented by following figures:

  • 30per cent of the working population in the UK are associated with work that is related to logistics
  • logistics represent between 10-15 per cent of the gross domestic product of most North American, European and Asia/ Pacific economies

These numbers represent some very substantial costs, and serve to illustrate how important it is to understand the nature of logistics costs and to identify means of keeping this costs to a minimum.

  • Supply chains

A supply chain is a complex logistics system in which raw materials are converted into finished products and then distributed to the final users (consumers or companies). A supply chain includes suppliers, manufacturing centres, warehouses, distribution centres and retail outlets.

Source: http://organizations.weber.edu/sascm/supply_chain.bmp

Logistics management is that part of the supply chain which 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 in order to meet customer & legal requirements.

Sources:

Ghiani, Gianpolo; Laporte, Gilbert; Musmanno, Roberto (2004), “Introduction to Logistics Systems Planning and Control”, Wiley Press.

Rushton, Allan; Oxley, John; Croucher, Phil (2004), “Logistics and Distribution Management”, Bell & Bain.

Hello to everybody,

this is my blog concerning the topic “Logistics”.

https://marcokai.files.wordpress.com/2010/03/logistics1.jpg?w=300[1]

  • Definition/Classification of logistic

Logistic copes with the planning and control of material flows and related information in organizations in the public and also in the private sectors. The mission of logistic is to get the right materials to the right place at the right time, while optimizing a given performance measure (e.g. minimizing operation costs) and satisfying a given set of constraints (e.g. budget).

In the military context , logistics is concerned with the supply of troops with food, armaments and equipment, as well as the transport of troops themselves. The historical leaders Hannibal Barca, Alexander the Great, and the Duke of Wellington are considered to have been logistical geniuses.

In civil organizations, logistic topics are encountered in firms producing and distributing physical goods. The main issue is to decide how and when raw materials, semi-finished and finished goods should be acquired, moved and stored.[2]

Logistics=Supply+Materials management+Distribution

  • Importance of logistic

To consider logistics in the context of business and the economy is absolutely necessary. Logistic is an important activity making extensive use of the human and material resources that affect a national economy.

The importance of the logistic sector is represented by following figures:

  • 30per cent of the working population in the UK are associated with work that is related to logistics
  • logistics represent between 10-15 per cent of the gross domestic product of most North American, European and Asia/ Pacific economies

These numbers represent some very substantial costs, and serve to illustrate how important it is to understand the nature of logistics costs and to identify means of keeping this costs to a minimum.

  • Supply chains

A supply chain is a complex logistics system in which raw materials are converted into finished products and then distributed to the final users (consumers or companies). A supply chain includes suppliers, manufacturing centres, warehouses, distribution centres and retail outlets.

https://marcokai.files.wordpress.com/2010/03/supply-chain.jpg?w=300

Source: http://organizations.weber.edu/sascm/supply_chain.bmp

Logistics management is that part of the supply chain which 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 in order to meet customer & legal requirements.


[2] Ghiani, Gianpolo; Laporte, Gilbert; Musmanno, Roberto (2004), “Introduction to Logistics Systems Planning and Control”, Wiley Press

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March 8, 2010

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