INTERNATIONAL PHYSICAL DISTRIBUTION

INTERNATIONAL PHYSICAL DISTRIBUTIONLogistics and Physical DistributionInternational TradeDefined as economic transactions that are made between countries. International trade transactions are facilitated by international financial payments, in which the private banking system and the Central Banks of the trading nations play important roles.

International Trade: economic transactions that are made between countries. Among the items commonly traded are consumer goods, such as television sets and clothing; capital goods, such as machinery; and raw materials and food. Other transactions involve services, such as travel services and payments for foreign patents (see service industry). International trade transactions are facilitated by international financial payments, in which the private banking system and the central banks of the trading nations play important roles.Source: http://www.britannica.com/EBchecked/topic/291349/international-trade

2Trade AgreementsThe purpose of Trade Agreements is to create opportunities for citizens and help to grow involved parties economy.Administering trade agreements involves:Monitoring the trading partners implementation.Negotiating and signing trade agreements that advance the President's trade policyAn important type of trade agreement is the Trade and Investment Framework Agreement (TIFAs)

Trade Agreements can create opportunities for Americans and help to grow the U.S. economy.

USTR has principal responsibility for administering U.S. trade agreements. This involves monitoring our trading partners' implementation of trade agreements with the United States, enforcing America's rights under those agreements, and negotiating and signing trade agreements that advance the President's trade policy.The United States is Member of the World Trade Organization (WTO), and the Marrakesh Agreement Establishing the World Trade Organization (WTO Agreement) sets out rules governing trade among the WTO's 154 members. The United States and other WTO Members are currently engaged in Doha Development Round of world trade talks, and a strong, market-opening Doha agreement for both goods and services would be an important contribution to addressing the global economic crisis and helping to restore trade's role in leading economic growth and development.

The United States has free trade agreements (FTAs) in effect with 17 countries. These FTAs build on the foundation of the WTO Agreement, with more comprehensive and stronger disciplines than the WTO Agreement. Many of our FTAs are bilateral agreements between two governments. But some, like the North American Free Trade Agreement and the Dominican Republic-Central America-United States Free Trade Agreement, are mulilateral agreements among several parties.

Another important type of trade agreement is the Trade and Investment Framework Agreement. TIFAs provide frameworks for governments to discuss and resolve trade and investment issues at an early stage. These agreements are also a means to identify and work on capacity-building where appropriate.The United States also has a series of Bilateral Investment Treaties (BITs) help protect private investment, develop market-oriented policies in partner countries, and promote U.S. exports.

Detailed descriptions and the texts of many U.S. trade agreements can be accessed through the Resource Center on the left.

Source: http://www.ustr.gov/trade-agreements

3PHYSICAL DISTRIBUTIONPhysical distribution encompasses all the activities involved with the physical movement of products through distribution channels. Specifically,physical distribution includes all activities related to the storage, handling, and movement of goods to make these goods available when and where customers demand them

Systems Approach to Physical Distribution

CUSTOMER ORDERThe beginning of the chain starts with a P/O, S/OFor knowing how much to order and when , companies , actually the procurement area has to stablish the ROP (reorder point)ROP = UR x LT + Safety Stock.Average order size(AOS) andaverage number of orders(ANO) gave us the UR (usage rate)LT = Lead timeWe have to check :Inventory (stock)Lead times for delivery of row material, supplies or finished-goods that we commercialise to know if we can accomplish our clients deadlines.Costs associated to this activity:Follow up of the customerCosts of allocating a purchase order to our suppliers

CUSTOMER ORDEROrder ProcessingLead time concept is involvedFinance is fundamental to have our p/o, p/s on timeKnowing and follow the companys rules is basic not to get our requirement rejectedsJIT concept : providers as well as our company offers certain LT and minimumsOrder ProcessingThese costs will be incurred with each order that is placed, By reducing the number of orders placed in a given time period, ordering costs per unit will decline.

Ordering costsThey are the costs associated with purchasing productsData processingFollow upWarehousing costsInventory ManagementIts not mandatory to have a WMS (wharehouse management system) to control your inventory. The correct management method is mandatory in order to keep your inventory accurate.Finding the right size of the inventory is key to reduce logistic costsAgain, JIT is present in order to keep the lowest inventory.Wharehouse materials and handlingThe facilityThe sizeThe MHE (material handling equipment)

Packaging for shipmentThe packaging selection is based on different criterias:Product natureTransportation modeCargo size Transit time,weather etc.