Assignment on Logistics and Operations Management

Logistics and Operations Management 1
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Logistics and Operations Management 2
Q1. What is productivity and how does it affect transportation economics?
Productivity refers to the optimum and efficient utilization of available resources; information
labor, energy land, capital materials and materials during the production process of goods and
services. High levels of productivity mean production of more goods and services using the same
amount of available resources or delivering a higher amount of output in relation to output
volume and quality using the same amount of inputs, (Börjesson, Isacsson, Andersson, &
Anderstig, 2019). Mathematically, it can be illustrated as a ratio of output and input;
Product = output/input
From a wider perspective, productivity captures the ability of resources transformation in
generating the desired output. Productivity measures give answers to important issues that affect
the transportation economics. For instance, it affects the efficiency and effectiveness of how the
transportation sector moves various resources which include labor, goods, and services and
indicate if the value of transportation services has grown exponentially as compared to the total
cost of input used. Productivity dictates how the transportation resources are allocated in order to
meet the desired needs. It affects the relationship between the existing factors of production.
Productivity effectiveness or improvement in using the available resources affects the overall
development of transportation, (Liu, Wang, & Wu, 2019). It results in a direct improvement in
various aspects involving transportation economics which are under distribution productivity
achievements in accordance with the gains made in optimizing resource allocation.
Q2. Why is transportation important to supply chain management? how does forecasting play a
part in successful supply chain management?

Logistics and Operations Management 3
Transportation involves moving materials, production parts, and finished products from one area
to another. Since the manufacturers, the market and the customers are scattered all over
geographically and because goods and services are rarely produced and utilized at the same
locality, transportation plays a major role in supply chain management. supply chain
management derives its success inappropriate utilization of transportation, (Zijm, Klumpp,
Heragu, & Regattieri, 2019). Transportation is critical to supply chain management as it affects
inventory flow, logistics, and visibility of firms as well as products. It affects the smooth running
of the whole supply chain process.
Forecasting plays an essential role in the supply chain process. it drives all supply chain
decisions. Although forecasting is an important aspect of supply chain management, it is one of
the most difficult aspects of supply chain processes, (Abolghasemi 2019). Forecasting is always
a volatile undertaking making it both a science and an art. Demand forecasting is critical to
supply chain management as it directly affects key business processes including production
planning, budgeting, raw material planning, financial planning and marketing planning,
(Abolghasemi, Gerlach, Tarr, & Beh, 2019). It plays a major role in the success of supply chain
management through;
1. Improved relations between the business and the suppliers and works towards the
negotiation of better purchasing terms
2. It creates room for capacity utilization and optimum resource allocation
3. It optimizes inventory levels
4. It improves the overall material distribution planning and the relevant logistics
5. It ensures better management of the product lifecycle and
6. It increases levels of customer service provision and enhances performance management

Logistics and Operations Management 4
References
Abolghasemi, M. (2019). Forecasting in supply chains: The impact of demand volatility in the
presence of promotions (Doctoral dissertation, University of Newcastle).
Abolghasemi, M., Gerlach, R., Tarr, G., & Beh, E. (2019). Demand forecasting in supply chain:
The impact of demand volatility in the presence of promotion. arXiv preprint arXiv:1909.13084.
Börjesson, M., Isacsson, G., Andersson, M., & Anderstig, C. (2019). Agglomeration,
productivity and the role of transport system improvements. Economics of Transportation, 18,
27-39.
Liu, C., Wang, W., & Wu, Q. (2019). Transportation infrastructure, competition and
productivity: Theory and evidence from China. Economics Letters, 174, 74-77.
Zijm, H., Klumpp, M., Heragu, S., & Regattieri, A. (2019). Operations, Logistics and Supply
Chain Management: Definitions and Objectives. In Operations, Logistics and Supply Chain
Management (pp. 27-42). Springer, Cham.