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Physical Distribution

This document discusses physical distribution, which involves making goods and services available to customers through transportation and storage. It describes the key components of physical distribution as order processing, transportation, warehousing, and inventory control. Order processing involves accurately fulfilling customer orders. Transportation carries goods from production to sale. Warehousing stores products to create time utility and for future consumption. Inventory control balances stock levels and costs to meet customer needs. The document provides an overview of the important aspects of getting products into customers' hands.

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Ayaan Saleem
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101 views8 pages

Physical Distribution

This document discusses physical distribution, which involves making goods and services available to customers through transportation and storage. It describes the key components of physical distribution as order processing, transportation, warehousing, and inventory control. Order processing involves accurately fulfilling customer orders. Transportation carries goods from production to sale. Warehousing stores products to create time utility and for future consumption. Inventory control balances stock levels and costs to meet customer needs. The document provides an overview of the important aspects of getting products into customers' hands.

Uploaded by

Ayaan Saleem
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Title Page

Habita School

PHYSICAL
DISTRIBUTION
Made by: Ayaan and Kashif
Title Page PHYSICAL DISTRIBUTION

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PHYSICAL DISTRIBUTION
Once goods are manufactured, packaged, branded,
priced, and promoted, these must be made available
to customers at the right place, in right quantity and
at the right time.
. It is concerned with making the goods and services
available at the right place, so that people can
purchase the same. There are two important
decisions relating to this aspect—one regarding
physical movement of goods from producers to
consumers or users and two, regarding the channels
and business institutions that combine physical
movement and title movement of products to reach
specific destinations. Mostly goods and services are
distributed through a network of marketing channels.
For example we buy merchandise of our need such
as salt, bulb, tea, sugar, soap, paper etc.
Types of Channels

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Types of Channels

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Components of Physical Distribution


1. Order Processing: In a typical buyer-seller
relationship order placement is the first step.
Products flow from manufacturers to customers via
channel members while orders flow in the reverse
direction, from customers to the manufacturers. A
good physical distribution system should provide for
an accurate and speedy processing of orders, in the
absence of which goods would reach the customers
late or in wrong quantitor specifications. This would
result in customer dissatisfaction, with the danger of
loss of business and goodwill.
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2. Transportation: Transportation is
the means of carrying goods and raw
materials from the point of production
to the point of sale. It is one of the
major elements in the physical
distribution of goods. It is important
because unless the goods are
physically made available, the sale
cannot be completed.
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3. Warehousing: Warehousing refers to the act of


storing and assorting products in order to create time
utility in them. The basic purpose of warehousing
activities is to arrange placement of goods and provide
facilities to store them. The need for warehousing
arises because there may be difference between the
time a product is produced and the time it is required
for consumption. Generally the efficiency of a firm in
serving its customers will depend on where these
warehouses are located and where are these to be
delivered. Generally larger the number of warehouses
a firm has, lesser would be the time taken in serving
customers at different locations but greater would be
the cost of warehousing and viceversa.
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4. Inventory Control: Linked to warehousing decisions are


the inventory decisions which hold key to success for
many manufacturers, especially those where the perunit
cost is high. A very important decision in respect of
inventory is deciding about the level of inventory. Higher
the level of inventory, higher will be the level of service to
customers but the cost of carrying the inventory will also
be high because lot of capital would be tied up in the
stock. Thus, a balance is to be maintained in respect of
the cost and customer satisfaction. With advancements in
computers and information technology the need for
keeping higher inventory is reducing and the new concept
of Just in-Time-Inventory decision is becoming popular in
an increasing number of companies
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Thank You

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