Maharashtra HSC Logistics Supply Management (Vocational) flashcards

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

Logistics definition

The planning, implementation and control of efficient forward and reverse flows and storage of goods, services and information from origin to consumption to meet customer requirements.

Bullwhip effect

Amplification of demand variability as orders pass upstream. Causes include forecast updating, order batching, price fluctuation, rationing and shortage gaming, all of which raise upstream inventory.

Seven rights of logistics

Delivering the right product, in the right quantity, in the right condition, at the right place, at the right time, to the right customer, at the right cost.

Reverse logistics

Movement of goods from the customer back to the producer for returns, warranty repair, refurbishment, recycling or disposal. Volumes are small and unpredictable, so cost per unit is high.

Kraljic purchasing portfolio

A matrix classifying purchased items by profit impact and supply risk into non-critical, leverage, bottleneck and strategic quadrants, each needing a different sourcing strategy.

Three-way match

A control comparing purchase order, goods receipt note and supplier invoice before payment. Any mismatch in quantity, price or terms is held for resolution to prevent overpayment.

Total cost of ownership

Purchase price plus transport, inspection, inventory carrying, quality failure and disposal costs. It is the correct basis for comparing suppliers, rather than unit price alone.

Reverse auction

An online event where prequalified suppliers bid prices downward against each other within a time window. It suits well-specified commodity items with several capable suppliers.

Economic order quantity

The order size that minimises the sum of ordering and carrying costs, calculated as the square root of twice annual demand times order cost divided by holding cost per unit per year.

Reorder level

The stock level that triggers a replenishment order, equal to average daily demand multiplied by lead time in days, plus safety stock where demand or lead time varies.

Safety stock formula

Buffer inventory equal to the service-level Z factor multiplied by the standard deviation of demand during lead time. Z is 1.65 for 95% and 2.33 for 99% service.

Cross-docking

A warehouse flow where incoming goods move directly from receiving to dispatch with no put-away or storage, requiring accurate advance shipment notices and synchronised inbound and outbound schedules.

Inventory turnover ratio

Cost of goods sold divided by average inventory value. Days of inventory equals 365 divided by the turnover ratio; a higher ratio means faster stock movement.

Incoterms 2020

Standard trade terms defining who arranges carriage, insurance and customs clearance, and where cost and risk transfer between seller and buyer. They do not transfer ownership of goods.

Chargeable weight air freight

The higher of actual gross weight and volumetric weight, where volumetric weight in kilograms equals length times width times height in centimetres divided by 6000.

Last-mile delivery

The final leg from a local depot or hub to the customer. It typically accounts for 40-50% of e-commerce logistics cost because drop sizes are small and failed deliveries common.

Freight consolidation

Combining several small shipments into a larger load to raise vehicle utilisation and cut cost per unit, accepting longer transit and less frequent departures.

Bill of lading

A transport document that acts as a receipt for goods, evidence of the contract of carriage and a document of title, so a clean on-board original is needed for payment under a letter of credit.

Air waybill

A non-negotiable air transport document serving as receipt and contract of carriage. It is not a document of title, so the consignee can take delivery without producing the original.

Letter of credit

A bank undertaking to pay the seller against presentation of compliant documents. Banks examine documents, not goods, so any discrepancy between documents causes rejection.

Certificate of origin

A document certifying the country where goods were produced. It supports preferential tariff claims under trade agreements and compliance with import licensing rules.

General average

A maritime principle under which a voluntary sacrifice of cargo or ship to save the whole voyage is shared proportionally by all cargo owners, which is why the contribution is insured.

ICC(A) cover

The widest standard marine cargo insurance clause, covering all risks of loss or damage to goods except those specifically excluded, such as inherent vice, delay and inadequate packing.

Assessable value

The customs value on which import duty is calculated, normally the transaction value on CIF basis plus buying commissions, royalties and assists not already included in the invoice.

Duty drawback

A refund of customs duty paid on imported inputs used in manufacturing export goods, claimed against proof of export, improving the competitiveness of export pricing.

Sales and operations planning

A monthly cross-functional cycle that balances an aggregate demand plan with a supply plan at product-family level, producing one consensus plan endorsed by senior management.

MRP inputs and outputs

Inputs are the master production schedule, bill of materials and inventory status. Outputs are planned orders, order release dates and exception messages for planners.

Vendor managed inventory

A arrangement where the supplier monitors the buyer's stock and sales data and decides replenishment quantities and timing, reducing stockouts but requiring data sharing and trust.

SCOR model

A supply chain reference framework organised around five processes: Plan, Source, Make, Deliver and Return, with an Enable layer for governance, data and standards.

Cost-to-serve analysis

Allocating total logistics cost to individual customers or channels by activity drivers, revealing that high-revenue accounts with many small orders and returns can be unprofitable.

Perfect order rate

The percentage of orders delivered complete, on time, damage-free and with correct documentation. It is stricter than on-time-in-full because it adds damage and document accuracy.

Cash-to-cash cycle

Days inventory outstanding plus days sales outstanding minus days payables outstanding. A shorter cycle frees working capital and is a key supply chain financial metric.

Warehouse management system

Software that directs put-away, picking, packing and dispatch using barcode or RFID scans, allocates tasks to operators and maintains real-time bin-level stock accuracy.

Electronic data interchange

Structured machine-to-machine exchange of standard business documents such as orders, invoices and advance shipment notices between trading partners, still dominant in retail and shipping.

Control tower

A centralised visibility layer that aggregates carrier, warehouse and transport system data to give one view of in-transit inventory, predicted arrival times and exceptions.

Electronic proof of delivery

A digital capture of signature, photograph and timestamp at the point of delivery, which speeds invoicing, shortens the cash cycle and reduces delivery disputes.

Digital twin in logistics

A simulation model of a warehouse or distribution network built from real process and time data, used to test layout, labour and flow changes before capital is committed.