Course-PM

TEK620 TEK620 Management of physical distribution lp3 VT25 (7.5 hp)

Course is offered by the department of Technology Management and Economics

Contact details

Examiner

Dan Andersson, dan.andersson@chalmers.se

Course purpose

The aim of the course is to provide knowledge about the different parts of the physical distribution system and the flow of goods from the shipping of finished products, transported via a number of nodes and actors, to the final customers/consumers. The course will provide an understanding of the relationships between cost, service and revenues, as well as environmental impact of distribution systems and how these are influenced by physical structures, actors and price mechanisms. The physical distribution is viewed from the perspective of an individual company, primarily a shipper (i.e. the company selling the products to be distributed) but also a logistics service/transport provider.

Schedule

TimeEdit

Course literature

All literature will be available on-line or in Canvas. A list of the literature is provided in a PDF of the course PM

Course design

The course takes its starting point in the need for distribution that shippers (manufacturing or trading firms) have and their distribution systems. The different functions in the physical distribution system are described and it is discussed how these should be managed and by whom and the effects of different logistics concepts are analysed. The focus is on costs and revenues and factors that influence them but also environmental as well as ICT aspects are considered. Price models and resource utilization is of great importance. The general requirements and cost structures connected to different modes of transport and distribution solutions are outlined and evaluated in the light of value creating in logistics. The connection and disconnection between cost and price in logistics and transport is further developed in the terms of full cost covered or marginal costs. This is of importance since the transport industry has a large portion of fixed costs and vaguely formulated marginal costs. Pricing with a base in marginal costs in relation to full financial coverage is discussed in the light of adjustments necessary to adapt economic models to financial realities, technical aspects, organizational preconditions and demands from the market. One especially important issue is resource utilization with regards to financial as well as environmental impact. The question of overcapacity in transport systems is further complicated by the fact that many systems are forced to work alongside of each other. One way of solving this is to utilize information technology in order to control the resources and movement (e.g. tracking and tracing) of goods.

The course contains the following topics:

• The different components and functions of the physical distribution system and their coordination and control.
• Cost structures connected to the different physical distribution structures and combinations of modes of transport.
• Resource utilization with regards to financial, organizational and environmental issues.
• Division of roles and responsibilities along the distribution chain.
• The demand for distribution services and how logistics and distribution services are procured.
• The role of logistics service providers in physical distribution.
• The use of information systems to control the movement and the tracking and tracing of goods.
• Price models for physical distribution services, and marginal cost pricing in relation to average cost.
• Customer value and consumer surplus.
• Physical distribution in urban areas

The course is built up around lectures, seminars and a group assignment. Theory is mixed with examples of practical applications in the industry.

 

Learning objectives and syllabus

Learning objectives:

• Analyze and explain how physical distribution systems are managed.
• Define and analyze resource utilization from a financial as well as environmental perspective while considering contextual influences.
• Explain the general requirements and cost structures of different distribution systems.
• Analyse and review economic models used in distribution.
• Explain the relationships between cost and price for logistics and transport services in physical distribution, including defining fixed and marginal costs as well as environmental effects.
• Use tools for quantitative analysis of distribution system data.

Link to the syllabus on Studieportalen.

https://www.chalmers.se/en/education/your-studies/find-course-and-programme-syllabi/course-syllabus/TEK620/?acYear=2025/2026

Examination form

The examination consists of the following elements: seminars, a case assignment (written report and  oral presentation including answering  questions) and finally a written exam. Individual parts of the examination must reach a minimum level for passing the course. In total these parts give 100 points and the course is graded as follows:

• Failed < 40% 
• 3 ≥ 40 %
• 4 ≥ 60 %
• 5 ≥ 80 %

The points for each part in the course are as follows:

• written exam: 0-77 points (pass 31 p)
• case assignment: 0-20 points (pass 8 p)
• seminar I: 1 point
• seminar II: 1 point
• seminar III: 1 point

Literature seminars

Three literature seminars are mandatory parts of the course. Each seminar assignment consists of two parts: (1) answering questions and formulation of an own question before the seminar (2) active participation in the seminar discussion.

Each seminar will be based on assigned readings, which will be provided in Canvas. To be allowed to participate in the seminars, you are required to show adequate knowledge of the literature by individually correctly answer multiple choice questions and formulate a question of your own. If your answers to the questions are insufficient you will be given the opportunity to make additional attempts.

Time table

Sem I 4^th February, preparations finalised at the latest 3^rd February

Sem II 14^th February, preparations finalised at the latest 13^th February

Sem III 7^th March, preparations finalised at the latest 6^th March

Further instructions will be provided in Canvas where you will find the assignments for each of the three seminars.

 

Case assignment

The case assignment is to be solved by a group of students, who are supposed to play the role of members of a consultant team. Your team is working for a logistics manager (at a fictional company), who needs support when analysing their distribution system. You will get support and guidance by a supervisor, who you during the course will meet at two supervision meetings. Each group will get an opportunity to submit  questions about the case company and get them answered by  its CEO. The answer will be based on his knowledge of the company, NB he is not a logistics specialist.

The presentation of your work will be at 14^th March, when you also should be ready to answers questions. 

Detailed instructions will be provided in Canvas. At the same place you will also find an initial information package about the case, which includes: background, shipment data, and an internal report about a new distribution set up. Additional information about the case will be provided continuously.