Explain briefly the components of physical distribution.
Answers
SOLUTION :
The components of physical distribution are :
(a) ORDER PROCESSING :
The product flow from manufacturers to customers and the orders flows in the reverse direction from the customers. The physical goods distribution system should provide for speedy and accurate processing of orders.
(b) TRANSPORTATION :
It is regarded as the backbone of any producing unit or company. If the means of transportation are not effective and quick, company may suffer loss and even loss their customer base.
(c) WAREHOUSING :
The important decisions in the distribution system is to choose the place of storage of the products. For the goods requiring long term storage, warehouses are located near the production site whereas the goods which are bulky in size are stored near the markets.
(d) INVENTORY CONTROL :
As for the inventory touches lower level, the store keeper order for more inventory. Higher the level of inventory will ensure higher customers satisfaction but it will lead to high holding and insurance cost.
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Physical distribution includes all the activities associated with the supply of finished product at every step, from the production line to the consumers. Important physical distribution functions include customer service, order processing, inventory control, transportation and logistics, and packaging and materials.