Question 1 List Key warehousing issues
Question 2 Describe Different warehouse configurations
Question 3 Identify Inventory management strategies.
Question 4 Explain the role of Information Technology systems in warehouse
Question 5 Identify potential reasons and implications for returning goods
Question 6 Describe the process for and implications of returning goods
Question 7 Describe Preparation for transportation and warehousing
Question 8 Describe Safe transportation
Question 1
Inaccurate Inventory
Incomplete or inaccurate records often reveal themselves when a warehouse worker attempts to retrieve product from an expected location and it is not there or then they are directed to store product into a location that’s already full. Time and effort are wasted making physical checks and trying to correct error, often leading to delayed shipments and mis-picks.
Redundant Activities
The existence of unnecessary, excessive handling of product plagues many warehouses, with cases or pallets being moved through several intermediate locations. Often, though, redundant activities can be less obvious. Duplication of information and duplicate data entry are examples of major timewasters.
Suboptimal Picking
If picking isn’t done efficiently, obviously time and money are wasted. Yet what does “efficient” look like? Ideally, picking minimizes time and movement, with the goal of maximizing units picked per hour. Warehouse automation can help with this by implementing automated retrieval and picking solution.
Poor Layout/Space Utilization
Achieving good space utilization has taken on new urgency with the rise of e-commerce. In fulfillment centers, there’s more movement and picking, increasing the cost of poor layout. Also, warehouse locations close to population centers often occupy more expensive land, which drives up costs.
. Product Diversification
Aligned with the growth of fulfillment centers, warehouses are holding a wider variety of items than ever before. While WES capacity isn’t usually one of the top warehouse problems, the increase in picking work most definitely is. As with space utilization, the answer lies in using WES to determine optimal storage algorithms to increase picking efficiency. Also, look at ways of reducing the physical work involved in fulfilling these picking tasks.
Seasonal Demands
How do you allocate space as workload varies seasonally? Configuring the warehouse for peak demand means potentially leaving areas underutilized the rest of the year.
High Labor Costs
Managers at distribution and fulfillment centers are under increasing pressure to reduce costs while improving service levels.
Handling Returned Items
File this under “poor layout” if you want, but it’s a problem big enough to warrant a separate heading. As e-commerce has grown, so too have return volumes. A common problem with an informal or haphazardly planned system incurs double handling. What’s more, poor record keeping results in workers spending time resolving queries.
Question two
The Warehouse management system in Supply Chain Management gives you flexible ways to define your warehouse layout to meet changing needs, so that you can achieve optimal warehouse efficiency.
You can establish high-priority and low-priority storages areas for optimum placement of goods.
You can divide your warehouse into zones to accommodate various storage needs, such as temperature requirements, or various turnover rates for items.
You can specify warehouse locations on any level (for example, site, warehouse, aisle, rack, shelf, and bin position).
You can group locations by using physical capacity constraint settings.
You can control how items are stored and picked, based on query-defined rules.
To use warehouse management in Supply Chain Management, you must create a warehouse and enable it for more advanced or specialized warehouse management activities. On the Warehouses page, select the Use warehouse management processes option.
Zone groups, zones, location types, and locations
As part of the process for enabling a warehouse layout, you must define warehouse zone groups, and zones, location profiles, location types, and locations.
Zone groups – A logical or physical grouping of zones within a warehouse.
Zones – A logical or physical grouping of locations within a warehouse.
Location profiles – A logical or physical grouping of locations that have the same warehouse location process policies (for example, a mix of different item numbers can be stored there, and the same physical capacity constraints apply).
Locations types – A logical or physical grouping of the warehouse locations. For example, you can create a location type for all staging locations. Mandatory settings on the Warehouse management parameters page drive the process of defining staging location types and the final shipping location type.
Locations – The lowest level of location information. Locations are used to track where the on-hand inventory is stored and picked in a warehouse.
The entities that you create to define your warehouse layout are used in the queries that you set up in work templates to drive work orders in the warehouse. Therefore, when you define the zones, location types, and so on, consider how different areas in the warehouse are used for different processes. Additionally, consider factors such as the physical characteristics of a particular area. For example, there might be areas where you can use only a certain type of forklift truck. Or, if your company has both production and finished goods within the same facility, you might want to create a single warehouse in Supply Chain Management but then separate the two operations by creating two zone groups. Give your entities descriptive names, so that it's easy to identify them when you use them in template queries.
Question three
Economic order quantity.
Economic order quantity, or EOQ, is a formula for the ideal order quantity a company needs to purchase for its inventory with a set of variables like total costs of production, demand rate, and other factors.
The overall goal of EOQ is to minimize related costs. The formula is used to identify the greatest number of product units to order to minimize buying. The formula also takes the number of units in the delivery of and storing of inventory unit costs. This helps free up tied cash in inventory for most companies.
Minimum order quantity.
On the supplier side, minimum order quantity (MOQ) is the smallest amount of set stock a supplier is willing to sell. If retailers are unable to purchase the MOQ of a product, the supplier won’t sell it to you.
For example, inventory items that cost more to produce typically have a smaller MOQ as opposed to cheaper items that are easier and more cost effective to make.
ABC analysis.
This inventory categorization technique splits subjects into three categories to identify items that have a heavy impact on overall inventory cost.
Category A serves as your most valuable products that contribute the most to overall profit.
Category B is the products that fall somewhere in between the most and least valuable.
Category C is for the small transactions that are vital for overall profit but don’t matter much individually to the company altogether.
Just-in-time inventory management.
Just-in-time (JIT) inventory management is a technique that arranges raw material orders from suppliers in direct connection with production schedules.
JIT is a great way to reduce inventory costs. Companies receive inventory on an as-needed basis instead of ordering too much and risking dead stock. Dead stock is inventory that was never sold or used by customers before being removed from sale status.
Safety stock inventory.
Safety stock inventory management is extra inventory being ordered beyond expected demand. This technique is used to prevent stock outs typically caused by incorrect forecasting or unforeseen changes in customer demand.
Reorder point formula.
The reorder point formula is an inventory management technique that’s based on a business’s own purchase and sales cycles that varies on a per-product basis. A reorder point is usually higher than a safety stock number to factor in lead time.
Batch tracking.
Batch tracking is a quality control inventory management technique wherein users can group and monitor a set of stock with similar traits. This method helps to track the expiration of inventory or trace defective items back to their original batch.
Consignment inventory.
If you’re thinking about your local consignment store here, you’re exactly right. Consignment inventory is a business deal when a consigner (vendor or wholesaler) agrees to give a consignee (retailer like your favorite consignment store) their goods without the consignee paying for the inventory upfront. The consigner offering the inventory still owns the goods and the consignee pays for them only when they sell.
Perpetual inventory management.
Perpetual inventory management is simply counting inventory as soon as it arrives. It’s the most basic inventory management technique and can be recorded manually on pen and paper or a spreadsheet.
Dropshipping.
Dropshipping is an inventory management fulfillment method in which a store doesn’t actually keep the products it sells in stock. When a store makes a sale, instead of picking it from their own inventory, they purchase the item from a third party and have it shipped to the consumer. The seller never sees our touches the product itself.
Lean Manufacturing.
Lean is a broad set of management practices that can be applied to any business practice. It’s goal is to improve efficiency by eliminating waste and any non value-adding activities from daily business.
Six Sigma.
Six Sigma is a brand of teaching that gives companies tools to improve the performance of their business (increase profits) and decrease the growth of excess inventory.
Lean Six Sigma.
Lean Six Sigma enhances the tools of Six Sigma, but instead focuses more on increasing word standardization and the flow of business.
Demand forecasting.
Demand forecasting should become a familiar inventory management technique to retailers. Demand forecasting is based on historical sales data to formulate an estimate of the expected forecast of customer demand. Essentially, it’s an estimate of the goods and services a company expects customers to purchase in the future.
Cross-docking.
Cross-docking is an inventory management technique whereby an incoming truck unloads materials directly into outbound trucks to create a JIT shipping process. There is little or no storage in between deliveries.
Bulk shipments.
Bulk shipments is a cost efficient method of shipping when you palletize inventory to ship more at once.
Question four
Information Technology Warehouse Management Systems have been available since the earliest computer systems and were allowed simple storage location functionality. Today WMS systems can be standalone or part of an Enterprise Resource Planning (ERP) system and can include complex technology such as Radio Frequency Identification (RFID) and voice recognition. However the basic principle of the warehouse system has remained the same, which is to provide information to allow efficient control of the movement of materials within the warehouse. The implementation of a WMS is often complex. Project planning is critical to the success of any WMS implementation. The project requires warehouse resources to collect data on the physical warehouse, materials, inventory as well as defining the strategies required to operate the warehouse. There is the added challenge of implementing the system whilst still operating the warehouse (Kerridge, 2006). The complexity of a WMS implementation varies with every business. The physical dimensions and characteristics of each item in the warehouse are required to be collected and entered into the new system. According to Hamzah (2001), capacity calculations require the physical size and weight of the item as well as the dimensions of all the storage bins or racks in the warehouse. The storage options for each item are required, for example if the item can be stored separately, in box, pallet or if it can be stacked. Each item must be reviewed to see if it is physical limitations on its storage, such as requiring refrigeration. Hazardous material information needs to be collected so that the item is not stored in certain areas. This information is only part of the requirements of the WMS implementation. The system requires decisions or configuration to be made on how items are to be placed or removed from the system, in what order, for what types of materials and what methods of placement and removal should be used (Hamzah 2001). The implementation requires significant input from the resources that operate the warehouse on a day to day basis and this can be a strain on warehouse operations. A successful project will recognize this fact and ensure that the key personnel required for the implementation are given adequate back up so that warehouse operations do not suffer (Gupta, 2003). According to Harold (2002) after the successful launch of the WMS system, many businesses will find that the resources required to operate the system is greater than prior to the implementation. This is primarily due to the data intensive nature of the software and the fact that warehouses are in a state of flux; racks are moved, placement and removal strategies changed, new items added, new processes developed. Warehouse accuracy is paramount for the software to operate and to do this data will need to be entered accurately and in a timely fashion. Although most WMS implementations will reduce labor costs in the placement and removal of materials, there is often an added warehouse management function required just to operate the software. Despite the complexity, WMS implementations do offer businesses significant benefits. Not only will placement and removal cycle times be reduced, but inventory accuracy should be improved as well as increased storage capacity, more organized storage of materials and greater flexibility of warehouse operations. This area of supply chain management studies was highlighted with the development of Electronic Data Interchange (EDI) systems in the 1960s and developed through the 1990s by the introduction of Enterprise Resource Planning (ERP systems. The area has continued to develop into the 21st century with the expansion of internet-based collaborative systems. It is characterized by the rapid growth of technologies. The way to capture their competitive advantage has become the most important issue for enterprises in the rapidly changing and uncertain business environments. Many researchers have pointed out that the adoption of technology is the most important tool for enterprises to keep their competitive advantage (Lazarus, 2000). Large organizations are procuring goods electronically because it is cheaper to do so and they get economies of scale, within a few years smaller businesses will follow suit. How does e-procurement affect the business? Some of the traditional face to face aspects of selling will diminish in importance, certainly in the early stages. The existing relationship with a customer may no longer be guaranteed as organization/institution implementing e-procurement search wider to find new suppliers. This increased competition will lead to tighter margins in a given organization. The very process of e-procurement opens up new markets for you. It’s a new way in for you and your company to bid for jobs in sectors you may previously have felt excluded from (Harold, 2002). Realigning your business to adopt e-procurement can be a challenging experience. However, practice makes perfect and once you have experienced the process, you will find it becomes second nature to do business the electronic way. In addition, there is no reason why a company couldn’t use the same e-procurement process to purchase your own goods and services – ensuring the best quality at the best price. Computer technology has provided opportunities for improving management. Computerized inventory management systems have the capability to manage and process large volumes of data quickly and provide reports. It is important to be aware of which systems are currently available in the marketplace and what they offer of inventory information (Everett, 2001). Most computer management systems track the instrument set through all processes and services. Others have additional options, such as instructional features on line, instrument preventive maintenance reminders, and employee tracking for productivity. Take time to review literature and assess different systems and costs. Although an automated system may require a substantial initial investment, it has proven to be a cost effective instrument management program. Scanning ensures accuracy of data entry. Instrument sets are scanned at specific workstations in order to know the location and status of any set at any time. Surgical instrument sets can be identified with a bar code label that identifies each set. Labels can be affixed to inner baskets and outside of containers and to the outside of trays that are wrapped. Computers track the flow of sets through the department and at each stage of the processing department. First, instrument sets are scanned when they enter the decontamination area. Scanning creates a record that the tray is there. The tray is scanned when the set arrives in the prep and pack area for assembly, when sterilized, and when delivered to the operating room or storage area (Lazarus, 2000). According to Harold (2002), through technology, one can gain cost advantage through pioneering lower cost products design and creating low-cost ways to perform needed operations, thus supporting differentiation by pioneering unique or services that increase buyer value and thus command premium prices. And in some cases technology can completely change the values of competition within an industry. An organization may benefit by developing a new technology within the company by providing an advantage over competitors. Adopting a new technology typically requires changes in the ways jobs are designed. The task is redefined to fit people to the demand of the technology to maximize the technology’s operation but often fails to maximize the total productivity because it ignores the human parts of the equations. Thus, the social relationship and human aspects of the task may suffer, lowering overall productivity. According to Gupta (2003), technology is probably one of the most widely used and latest precisely defined terms in business and it is something that affects businesses in all forms and activities. Information technology does make extra-ordinary contribution to organization productivity. Nevertheless the same exciting technology produces negative consequences for example intensive use of information reformats customer service as follows: the managers or employees become computer goofs, they spend so much time attempting new computer routines and accessing information of questionable value that they neglect key aspects of customer service. A problem of considerable magnitude comes from the deterioration in customer service that sometimes accompanies information technology. Many banks for example force customers with a service problem to use toll free numbers rather than allowing them to deal with a branch representative. A voice response system instructs the customer to punch in lengthy account numbers and make a choice from a complicated menu. The process is time consuming and personal (Liao, 2007). According to Larson (2004), explains that conflicts in managing systems and processes arise when they do not deliver to users what they are expected to deliver. Users expect an appropriate design and full support, if either of these are lacking, they are rightly angry that is; their design does not take sufficient account of user needs and is not user friendly. They no longer serve their original purpose. The manager pays insufficient attention to developing them to meet new demands. Support from technicians is inadequate thereby relying heavily on a computer system which is prone to failures. The reason why businesses should want to develop information systems is because it improves customer service. Computer systems can often allow organizations to serve customers more quickly or to provide them with additional services. To improve management information, management decisions can only be as good as the information on which they are based, thereby enabling managers to institute new types of enquiry when changing business conditions, demand new or different information to secure or defend competitive advantage. According to Sagimo (2002), Sigma is the combination of tools, machines, computer skills, information and knowledge that managers use in the design, production and distribution of goods and services, and technological forces are outcomes of change in the technology that managers use to design, produce or distribute goods and services. These forces have profound implications for managers and organizations. Technological changes can make established products obsolete forcing managers to find new ways to satisfy customers’ needs. Although technological change can threaten an organization, it can also create a host of new and better kinds of goods and services. Although most WMS implementations will reduce labor costs in the placement and removal of materials, there is often an added warehouse management function required just to operate the software hence, managers must move quickly to respond to such changes if their organizations are to survive and prosper.
Question five
The customer bought the wrong item or changed their mind once they received it.
You might be hard-pressed to find a person who had never made a mistake or changed their mind about a purchase. The odds are good you've done it yourself. There isn't much you can do to prevent a customer from feeling differently about a purchased item once they see it in person, and you can't prevent every mistake on their part. But what you can do is to ensure that all your product information and images are accurate, clear, and complete so the customer knows exactly what they're getting. This won't completely prevent this type of return, but providing the customer with comprehensive product information will mitigate many of them.
The merchant shipped the wrong item.
If you've never had the wrong item shipped to you, you might wonder how often this happens. It's actually quite common, and even large retailers like Amazon and Office Depot have done it. All it takes is a small error at any point in the pick, pack, and ship process, and soon a customer will be opening their newly-received order to discover a mystery item instead.
Naturally, the customer will contact you — but in this case, if they initiate a return, consider yourself lucky. According to the Federal Trade Commission, it's illegal to bill a customer for something they didn't order (even if they did order something else) and so your customer is under no obligation to return the item to you, even if you issue a refund. Of course, some may offer to return the product, but you'll have to pay shipping and handling charges. It's best to make every effort to avoid this situation in the first place.
3. Purchase arrived too late or the customer doesn't need it anymore.
A purchase can be a "late arrival" in a customer's mind for many reasons. Maybe they needed it for an event, which passed before the item arrived. Maybe they just got impatient and bought it elsewhere. Late arrival is frequently the cause of an item being no longer needed, but sometimes it overlaps with the customer changing their mind. Either way, all you can do to mitigate this type of return is to provide clear, real-time shipping information, preferably with tracking numbers included, so customers can be aware of the exact time frame in which they'll receive their order — that, and processing your orders promptly so they can ship out on time.
"Wardrobing."
Wardrobing is a fraudulent practice in which a customer buys an item they intend to use for a very short time and then return afterward. You're probably familiar with the often-repeated tale of a woman buying a dress for a special occasion and wearing it with the tags tucked inside, only to return it a few days later. This is a type of wardrobing. A businessman who purchases a classy new briefcase to bring to an important meeting and then return after he's impressed his clients is also engaging in wardrobing. Many shoppers feel that this is a perfectly legitimate practice (believe it or not), but it's fraud.
Wardrobing doesn't stop at clothing items, either — electronics, kitchen equipment, and anything else you can think of with the potential to be used for a special event can be subject to this type of behavior. Plates have been returned with food residue on them. Therapeutic knee braces have been returned after 2 weeks of injury recovery. When it comes to wardrobing, if you can picture it, it's probably been attempted.
Wardrobing can be difficult to avoid, because some customers who engage in this practice are real experts at it. The best means of protecting yourself from this kind of fraudulent return is to implement strategies around it, like placing clothing tags in obvious places where they cannot be concealed during wear. It also helps to use an RMA system that allows you to request photos from the customer before you accept the item — make sure you use reliable eCommerce software that supports this feature.
The product was damaged or defective.
Accidents in shipping are always possible, and even if you send out a pristine item, the worst can happen and it can arrive in a thousand pieces. If you get a lot of feedback about broken items, reevaluate your packing procedure and take better steps to protect your products.
Defective merchandise is another matter, and serves as a reminder that you should inspect your inventory and try to weed out any products that meet that description. If a large number of your products are being returned as defective, take a close look at your means of warehousing, as temperature, moisture, and other environmental factors can damage many types of merchandise. Depending on what you sell, you might also have access to batch or lot numbers, in which case you might be able to identify defective products as all coming from a particular lot or shipment.
Question six
Step 1: Verify product returns request
When a customer brings an item to the store and asks for an exchange or refund, the sales staff will need to verify this request. They’ll have to confirm that this product has been purchased from your store. The most common proof is a receipt. In some cases, the customers may request a return without a receipt. They can still show some proof like a bank statement or confirmation email. Some businesses might reject the return request in this case. However, consumer rights laws in your country may require you to accept returns for faulty products without a receipt.
If the customer is eligible for a refund or exchange, the cashier will create a return request in the system.
Step 2: Create a return request
To process an in-store product return, your staff usually have to find the past order in your point of sale system. Different systems will offer a variety of options to find this order such as:
Scan the customer’s receipt
Input the order ID or number
Search for the order with customer or product information
The cashier can then select the order and start the return process. They’ll have to select the products in the original order and the quantity to return. Some POS also let staff return the product to stock right on the screen. When the customer wants to exchange what they brought for another product or the same product in a different size or color, the staff will need to add the new product to cart.
Step 3: Process payment & complete return
In the case of product refunds, the cashier will have to refund the payment to the customer. Different POS system might offer the following options:
Refund by original payment method. Most customers prefer to get a refund via the original payment method. Some POS systems let you issue payment while others require extra steps on the payment device. If you are using a terminal to process the transaction, make sure your cashiers get the training they need to handle it efficiently.
Refund by cash. If the customer paid for the original order by cash, they might expect a cash refund.
Refund by points or vouchers. Some stores offer refunds in the form of points, store credits, or gift cards. Your cashier can add the refund value to the customer’s account or gift card balance. The customer can use the balance the next time they purchase from your store.
In the case of a product exchange, the POS system will need to calculate the difference between the price of the old and new item.
If the items have the same price, there’s no need for additional payment.
If the new item has a higher price, the customer will have to pay the difference.
If the new item price is lower, the cashier should be able to refund the difference to the customer.
In addition to product price, some in-store product returns may include an additional cost. For example, customers might choose to have their new items delivered later and pay for shipping. Some brands also place a restocking fee on opened items. The staff should have the ability to add these additional fees during the return process.
Step 4: Complete in-store product returns
Once payment is complete, the staff should also note down the reasons for return. Product returns offer invaluable data that will help retailers make merchandising decisions in the future.
When the staff completes the return request, the POS should synchronize data into the rest of your system. There should be updates in the original order, your revenues, profit, tax, and so on.
In some systems, product returns information will appear directly in the original order.
Step 5 : Return item to inventory
Most POS systems allow returning the item to inventory. When the return process is complete, the quantity of the returned items will be added back to your inventory. Depending on product conditions and your business rule, you may choose to resell these items as open box or refurbished products.
Question seven
The transportation and distribution of goods is an integral facet for every business in manufacturing products. Planning how you will get your products from your company to your customers requires strategic operations designed to consider, anticipate and account for every variable that affects moving items from point A to point B. Although all transportation and distribution plans are distinct to their respective companies, there are key aspects specific to all. Your plan must reflect and address all points surrounding transportation and distribution particular to your company.
Health and Safety Guidelines
Important to every business is employee safety. The results of improper planning often end in the company feeling a substantial financial impact. When working around and with heavy equipment and hazardous materials normally associated with transportation and distribution requires you and your personnel be even more conscientious because opportunities for accidents increase significantly. Addressing and enforcing minimum safety requirements, such as those mandated by OSHA, is imperative to your transportation and distribution plan.
Logistics
The logistical aspect of your transportation and distribution plan needs to incorporate the actual treatment of items and personnel. For example, when staff transport products, identify procedures that account for layovers, inclement weather or other emergencies. Effective personnel management is crucial here. Likewise, determine and account for how goods are retrieved, managed, maintained and delivered to the customer in the most efficient way. Additionally, plan how you will sustain quality control, such as retaining temperatures for food products or other sensitive materials to maintain product integrity.
Maintenance and Transportation
The maintenance and transportation feature of your plan specifically deals with the facility, vehicle and equipment you use to carry out distribution. It involves deciding what is needed to perform distribution and how to maintain the tools you need. For instance, plan what size and type of vehicles are needed to transport your products, as well as what equipment is required to load or unload the vehicles. Furthermore, establish maintenance procedures to ensure sustainability of the facility, vehicles and equipment. Organize and arrange maintenance hierarchy and designate staff responsibilities.
Storage and Distribution
Plan for how products, items and materials are stored and delivered to your customers in a timely manner. Your storage and distribution plan will account for every step of transfer such as air, freight, ports and docks. Additionally, it addresses what tracking systems to use that identify when products left your possession, projected times of arrival, and current location at any given time along the way.
Question eight
While issues of safety and security have preoccupied transport planners and managers for many years, it is only recently that physical security has become an overriding issue. Over this, an important nuance must be provided between criminal activities and terrorism. While both seek to exploit the security weaknesses of transportation, they do so for very different reasons. Terrorism is a symbolic activity seeking forms of destruction and disruption to coerce a political, ideological, or religious agenda. In this context, transportation is mostly a target. Criminal activities are seeking an economic return from illegal transactions such as drugs, weapons, piracy, and illegal immigration. In this context, transportation is mostly a vector for illicit transactions. Concerns were already being raised in the past. Still, the tragic events of 9/11 thrust the issue of physical security into the public domain as never before and set in motion responses that have re-shaped transportation in unforeseen ways. In addition, threats to health, such as the spread of pandemics, present significant challenges to transport planning and operations.
As locations where passengers and freight are assembled and dispersed, terminals have particularly been a focus of concern about security and safety. Because railway stations and airports are some of the most densely populated sites anywhere, crowd control and safety have been issues that have preoccupied managers for a long time. Access is monitored and controlled, and movements are channeled along pathways that provide safe access to and from platforms and gates. In the freight industry, security concerns have been directed into two areas: worker safety and theft. Traditionally, freight terminals have been dangerous workplaces. With heavy goods being moved around yards and loaded onto vehicles using large mobile machines or manually, accidents were systemic. Significant improvements have been made over the years, through worker education and better organization of operations, but freight terminals are still comparatively hazardous. The issue of theft has been one of the most severe problems confronting all types of freight terminals, especially where high-value goods are being handled. Docks have particularly been seen as places where organized crime has established control over local labor unions
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