Explain the role of physical distribution in an effective marketing
The goal of the physical
distribution function is to produce a specified level of customer service while
minimizing the costs involved in physically moving and storing the product from
its production point to its ultimate purchase.
Identify and compare the major components of a physical distribution
involves a broad range of activities concerned with efficient movement of
finished goods from the end of the production line to the consumer. As a
system, physical distribution consists of six elements: (1) customer service,
(2) transportation, (3) inventory control (4) protective packaging and
materials handling, (5) order processing, and (6) warehousing. These elements
are interrelated and must be balanced to create a smoothly functioning
distribution system and avoid suboptimization.
Outline the suboptimization problem in physical distribution.
to a situation in which each manager of a physical distribution activity
attempts to minimize his or her costs, resulting in a negative impact on other
physical distribution activities. The objective of the physical distribution
function is to focus on total distribution costs to minimize the degree of
Explain the impact of transportation deregulation on physical distribution
Deregulation has had a
profound effect on transportation in
recent years. Many transporters
now are free to develop unique solutions to shippers' needs. Deregulation has
been particularly important for motor carriers, railroads, and air carriers.
Compare the major transportation alternatives on the basis of factors such
as speed, dependability, cost, frequency of shipments, availability in
different locations, and flexibility in handling products.
rank high on flexibility in handling products and availability in different locations;
average on speed, dependability in meeting schedules, and cost; and low on
frequency of shipments. Motor carriers are relatively high in cost but are
ranked high on speed, dependability, shipment frequency, and availability in
different locations. Water carriers balance their slow speed, low shipment
frequency, and limited availability with very low costs. The special nature of
pipelines makes them rank relatively low on availability, flexibility, and
speed but also low in cost. Air transportation is high in cost but offers very
fast and dependable delivery schedules.