CLTD flashcards

32 cards. Read the term and the definition here. The deck at the top of this page is optional.

Seven Rs of logistics

The seven requirements of effective logistics output: the right product, in the right quantity, in the right condition, delivered to the right place, at the right time, to the right customer, at the right cost.

Total cost approach

An evaluation method that compares alternatives by summing all relevant costs, including procurement, transportation, inventory carrying, warehousing, and service failure, rather than choosing the lowest unit price or freight rate.

Bullwhip effect

The phenomenon where small changes in end-customer demand produce progressively larger swings in orders and inventory moving upstream, driven by forecast updating, order batching, price promotion, and shortage gaming.

Reverse logistics

The planning and control of flows moving from the point of consumption back toward origin, covering returns, recalls, repairs, refurbishment, recycling, and disposal, plus the information and funds that accompany them.

Derived demand

Demand for logistics and transportation services that exists only because of demand for the goods being moved, so freight volumes rise and fall with underlying product demand rather than independently.

Place and time utility

The value logistics creates by making a product available where and when customers want it, complementing the form utility created by production and the possession utility created by marketing.

Logistics trade-off

An exchange between logistics activities in which one cost or service factor is accepted to improve another, such as paying more freight for faster transit to reduce pipeline inventory and safety stock.

Third-party logistics provider

An external firm that performs outsourced logistics functions such as transportation, warehousing, cross-docking, and order fulfillment under contract, letting the shipper avoid owning and operating those assets.

Economic order quantity

The order size that minimizes the sum of annual ordering cost and annual holding cost, computed as the square root of twice annual demand times order cost, divided by annual holding cost per unit.

Reorder point

The inventory level that triggers a replenishment order, equal to average daily demand multiplied by lead time in days, plus safety stock held to cover demand or lead-time variability.

Safety stock

Buffer inventory held against demand and lead-time uncertainty; under demand variability it equals the Z value for the target service level times the demand standard deviation times the square root of lead time.

ABC analysis

A Pareto-based classification ranking items by annual dollar usage, where A items form a small share of SKUs but most of the value and receive tight, frequent control, while C items receive looser control.

Sales and operations planning

A recurring cross-functional process that balances an unconstrained demand plan against supply, capacity, and financial plans to produce one agreed operating plan for the business.

Distribution requirements planning

A time-phased replenishment technique that extends MRP logic through the distribution network, calculating planned orders at each warehouse and consolidating them into upstream supply requirements.

Center-of-gravity method

A facility location technique that finds the site minimizing weighted transport distance by averaging customer coordinates, with each coordinate weighted by shipment volume, tonnage, or freight cost.

Days of supply

The number of days that current on-hand inventory will last at the expected usage rate, calculated as on-hand inventory divided by average daily demand.

Cross-docking

A flow-through practice in which inbound shipments are received, sorted, and reloaded onto outbound vehicles with little or no storage, requiring accurate labeling and tightly synchronized inbound and outbound schedules.

Incoterms 2020

Standard international trade terms published by the International Chamber of Commerce that define which party arranges and pays for freight, insurance, and customs, and where risk of loss transfers.

Delivered duty paid

An Incoterm under which the seller bears all costs and risks to deliver goods cleared for import at the named destination, including import duties and taxes, representing maximum seller obligation.

Slotting

The warehouse layout decision assigning SKUs to storage locations based on velocity, cube, and weight, typically placing fast-moving items in accessible positions near shipping to reduce picker travel.

Wave picking

An order-picking method that releases a group of orders for picking at the same time, often grouped by carrier cutoff or delivery route, then sorts picked items to individual orders before packing.

Cube utilization

The percentage of a trailer or container's internal volume actually occupied by cargo, calculated as cargo cubic volume divided by vehicle cubic volume multiplied by one hundred.

Bill of lading

A transport document that serves as a receipt for goods, evidence of the contract of carriage, and, when issued in negotiable form, a document of title that must be surrendered to claim the freight.

Dock-to-stock cycle time

The elapsed time from arrival of a receipt at the receiving dock until the goods are verified, put away, and recorded as available to promise in the inventory system.

Perfect order index

A multiplicative service measure computed by multiplying the percentages of orders that are on time, complete, damage-free, and documented accurately, so any single failure penalizes the entire score.

On-time in-full

A delivery performance metric requiring an order to arrive within the agreed delivery window and in the full ordered quantity; late arrivals and partial shipments both count as failures.

Inventory turnover

The number of times inventory is sold and replaced in a period, calculated as cost of goods sold divided by average inventory value; higher turnover generally signals leaner working capital.

Cash-to-cash cycle time

The number of days between paying suppliers and collecting cash from customers, computed as days inventory outstanding plus days sales outstanding minus days payables outstanding.

SCOR model

A supply chain reference framework built on Plan, Source, Make, Deliver, Return, and Enable processes, used to describe, benchmark, and improve supply chain configuration and performance.

Cost-to-serve

An activity-based analysis that assigns order handling, logistics, and service costs to individual customers, orders, or segments to reveal which accounts are unprofitable at current service levels.

Cycle counting

A continuous inventory audit method in which a subset of SKUs is counted on a rotating schedule, allowing errors to be detected and corrected without shutting down operations for a full physical inventory.

Benchmarking

The practice of comparing an organization's logistics performance metrics against internal best-performing sites, direct competitors, or published industry standards to identify gaps and set improvement targets.