Explain the components of physical distribution. Components of Physical Distribution Class 12 Notes 2022-10-27

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Physical distribution refers to the movement and storage of goods from the point of production to the point of consumption. It plays a critical role in the supply chain management of any organization, as it helps to ensure that the right products are delivered to the right place at the right time. There are several key components of physical distribution that help to make this process as efficient and effective as possible.

One of the key components of physical distribution is transportation. This involves the movement of goods from one location to another, whether by land, air, sea, or a combination of these modes. Transportation can be performed by a variety of means, including trucks, trains, airplanes, and ships, and it is important to choose the most appropriate mode of transportation based on the size and weight of the goods, the distance they need to travel, and the time frame in which they need to be delivered.

Another important component of physical distribution is warehousing and storage. This involves the temporary or long-term storage of goods in a facility until they are needed for distribution. Warehouses can be used to store raw materials, finished products, or both, and they can be owned by the organization itself or leased from a third party. Good warehousing practices are essential for ensuring the safety and integrity of the goods, as well as for optimizing the efficiency of the distribution process.

A third component of physical distribution is order processing and fulfillment. This involves the handling of customer orders, including the preparation of invoices and packing slips, the selection and packing of products, and the coordination of delivery. Order processing and fulfillment can be performed manually or with the help of automated systems, and it is important to choose the approach that best meets the needs of the organization and its customers.

Finally, physical distribution also includes the management of inventory and stock levels. This involves the tracking and control of the movement of goods into and out of the organization's warehouses and other storage facilities, as well as the monitoring of stock levels to ensure that there is always a sufficient supply of products to meet customer demand. Inventory management is an essential part of physical distribution, as it helps to prevent stock-outs and overstocks, which can lead to lost sales and increased costs.

In summary, physical distribution is a complex and multifaceted process that involves the movement, storage, and management of goods from the point of production to the point of consumption. It is an integral part of the supply chain management of any organization, and it requires careful planning and coordination to ensure that the right products are delivered to the right place at the right time.

Explain the components of physical distribution.

explain the components of physical distribution

Train to truck is called piggyback and water to truck is called fishy back. Therefore, the modes and routes are effectively organized and scheduled through logistics. The seller should manufacture the product keeping in view this tendency of the customer. Supply chain management starts before physical distribution. ShipBob offers resources, expertise, and support to help you make more informed decisions, such as if and where you should expand your physical distribution network over time. The packaging method, the size, and the product's nature will dictate the material handling methodology and equipment used. For example, industrial markets are usually concentrated in a few large cities involving only large customers.

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What is Physical Distribution? The Importance of Physical Distribution

explain the components of physical distribution

How much inventory should be kept for various items? Trans­port is called the Gordian Knot, if not the snake pit, of physical distribution management. Transportation Subsystem : It involves the choice of transportation carriers. Ordering and carrying costs are important considerations in inventory management. Relations : In the era of relationship marketing, the marketer must maintain long-term profitable relations with various transport agencies. They offer credit to customers and accept returned merchandise.


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Physical Distribution Management: Definition + Types

explain the components of physical distribution

On the other hand, with the slight increase in demand because of the scarcity of inventory the consumers will turn to the rival companies. They consider physical distribution second in importance to product quality as a reason for buying from a certain firm. For this time period material has to be kept in stock. Instead, the intermediaries come in search of them. The main reason as to why this decision is important is that if the inventory is either more or less than required, both the situations have their advantages and limitations.

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What is Physical Distribution?

explain the components of physical distribution

Transportation Transportation means the physical movement of the goods from one place to another i. Thus, a channel which is quick and is able to meet the demand in less time will be helpful in maintaining lower levels of inventory. Overall costs are often significantly lower under this arrangement than with single-mode transport. As a matter of fact, finding new avenues may prove to be costlier and cumbersome. Once received, orders must be processed quickly and accurately then shipped to the customer. After that, the company does a credit check and invoices, and the product is located.

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Components of Physical Distribution

explain the components of physical distribution

Retailers also sometimes finance their suppliers either directly or by investing in the company. The sub functions of warehousing are — a. Inventory: By inventory we mean the stock of raw material, semi-finished goods and finished goods held in anticipation of sales or use. Thus, a company must weigh the relative benefits and costs associated with warehousing and maintain a balance between the two as per the requirement. The location is also important for the kind of product the company is dealing in.

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Explain briefly the components of physical distribution.

explain the components of physical distribution

Their analytics tool has been great to have. This strategy is typical for fashion brands such as New Balance Company. The author has about to 10-year Experience in the tuition Business. This can be done by analyzing your current levels of customer satisfaction and service, as well as your current warehousing, inventory, and transportation processes. One of the most important physical distribution functions is customer service which are strategic standards that enhance customer satisfaction. Sending a product by air is faster for international delivery, but it is also likely to be more expensive. He may be line administrator, a manager with staff responsibility, or the combination of both staff and line function.

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What is Physical Distribution in Supply Chain Management?

explain the components of physical distribution

This can also become a competitive advantage to the product. Private Warehouses are owned by individual, or firms. Marketing Director: A number of institutions neither constitute any committee not any department separately for discharge of the responsibility of physical distribution. Physical distribution takes place within numerous wholesaling and retailing distribution channels, and includes such important decision areas as customer service, inventory control, materials handling, protective packaging, order procession, transportation, warehouse site selection, and warehousing. The company wants to raise it to 40 per cent. Examining Cost Trade Offs: The cost tradeoffs for physical distribution components must be evaluated to determine how and to what extent each component will be utilised in the P.

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4 Important Elements of Physical Distribution of Products

explain the components of physical distribution

Another objective for physical distribution is to put in suitable inventory policies so as to bring down the total cost of the physical distribution function. This is understood by studying the factors that influence the choice of distribution channels, which are described below: 1. Modern warehouses enable to store or preserve perishable products, like milk, fruits, vegetable, flowers, and certain types of chemicals, for reasonably longer period. Non-mechanical handling — Under this non-mechanical handling, human labour is used instead of machines. Automated Order Processing With automation technology, customers are able to place orders from around the world at any time, and companies are able to process these orders just as easily.


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Explain briefly the components of physical complianceportal.american.eduical distribution includes some components for physically moving the goods from manufacturers to the customers. Explain these components. from Business Studies Marketing Class 12 Haryana Board

explain the components of physical distribution

A product promoted by an established and reputed manufacturer has a higher degree of market acceptance and, therefore, can be sold through various channels with little effort. To improve competitive strengths, etc. Like advertising, personal selling, publicity and sales promotion etc. Click the button below to learn more about how ShipBob works. It is a process that minimizes inventory control costs such as warehousing and labor costs.

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Explain briefly the components of physical distribution.

explain the components of physical distribution

A seller tries to find out the needs of the consumers and how those needs are to be satisfied. Keeping an eye on inventory as it moves can be a time-consuming task, but with the right inventory tracking processes in place, you can easily optimize stockouts and , as well as. The Second is, costs of stock out or shortage, which include loss of sales, adverse impact on goodwill, losing customers permanently due to shortage of stocks, and administrative costs. Thus, the firms must strike a balance between customer service and cost. Consequently, the system becomes an initiative for saving costs. Accuracy in Sales Forecasts: If accurate forecasts are available, then firms can manage with less stock. A minimum cost physical distribution system is the system with the lowest cost that can provide a specified level of customer service.

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