Project Logistics

This paper project will be addressed to the consideration of a logistic chain at the stage of distribution, which is generated by the following market participants:  wholesale dealer (distribution center), retail network and transport company servicing sector “wholesale dealer – retail network”.  All transport services are provided by motor transport.

In the process of the work there will be analyzed the existing logistic chain functioning condition, involving the use of such effectiveness criterion as “net present value” (NPV). Following proper calculations, there will be introduced predictable changes in operation of the logistic chain and its principal components (participating elements) in order that the assessment can be made of how such changes will influence the effectiveness of logistic chain operation and the net present value parameter.

The paper project suggests and introduces specific measures to improve operation of the chain at the expense of capital investments, as well as by bringing logistic infrastructure into line with current demands. Effectiveness of the system under study was enhanced on the account of investments made in the sphere of work carried out by each participating element of the chain.

In the concluding part of the paper project the system performance results are compared with the reference to every condition: under the existing conditions, under conditions of introduction of predictable changes, and following implementation of suggested measures. It is found advisable that the above comparison be drawn with the focus being made on the factor of net present value, representing the main criterion of logistic chain operation effectiveness. As a result of the comparison, the conclusion should be made as to advisability of changes and measures that were suggested.


Figure 1.1. Layout of system under study

(Логістичний ланцюг – Logistic chain; Розподільчий центр – Distribution Center; ТП – Transport company; Споживач – Consumer; Роздрібний торговець – Retail dealer)

Table 2.1 Structure of expenses borne by logistic chain participating elements, which is applicable to current operation conditions (in “no project” situation)

 

Participating element

Current costs

Taxes

Distribution Center — rental payment;         — wages payment;        — equipment maintenance and repair cost;                           — cost of fuel for loaders, having internal combustion engines;     — general economic costs — income tax;- value-added tax
Transport company — wages payment;        — transport facility maintenance and repair cost;                           — fuel cost;                   — general economic costs — income tax;               — value-added tax;        — tax on owners of transport facilities

 

 

 

Participating element

Current costs

Taxes

Retail network participating element — rental payment;         — wages payment;        — equipment maintenance and repair cost — single tax of 10 %

 

 

 

LIST OF REFERENCES

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  2. R.R. Larina. Logistics: Teaching Handbook. – D.: “VIK”, 2005. – 335 pages
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  11. D.M. Roslavtsev (2011). Methodological Guide for Preparation of Term Paper in Subject “Management and Engineering of Logistic Systems” (intended for 5th-year full-time students and 6th-year correspondence students in specialties 7.03060107, 8.03060107 – “Logistics”)
  12. D.M. Roslavtsev (2011).  Methodological Guide for Preparation of Calculation-and-Graphic Paper in Discipline “Planning Analysis 2” (intended for 5th-year full-time and correspondence students, field of study 0701 – “Transport and Transport Infrastructure”)