Inbound Logistics Essay

1. Determine and clarify the logistics costs

Logistics costs are the costs that involved in logistics activities such as transportation, inventory management, warehousing, packaging and so on. Inbound transportation costs including train travel, trucks, air travel and sea transport, inventory carrying costs as part of total logistics costs, customer service costs and others. Companies need to manage their logistics with a balance between cost and performance, since the lowest-cost transportation path is not necessarily the fastest. Additional logistics costs include packaging, warehousing, security, materials handling, fuel, taxes and duties.

Inbound Logistics (IL)

Suppliers move the raw materials in the production processes or storage facilities.

Outbound Logistics (OL)

The process related to the movement and storage of products from the end of the production line to the consumers.Outbound logistics refers to the processes involved in moving products from thecreating firm to the firm’s customers. The field is focused on two concepts which are transportation and storage. The storage part of the field uses warehousing methods to keep the finished goodsand make sure the goods are accessible and safety. The transportation part is generally the more important and complex part of outbound logistics.

2. List and explain the costing tools in logistics costs

The costing tool that can be used in inbound stage is Value Chain Analysis. Value Chain Analysis is a useful tool for create the greatest possible value to the customers.

In manufacturing perspective, where the manufacturer "adds value" by taking a raw material of little use to the end user (for example, woods) and converting it into something that people are willing to pay money for such as paper. Firms or Companies can use inputs of time, knowledge, equipment, technology and systems to create services of real value to the