Physical Distribution and Logistics

Physical Distribution and Logistics

• Physical distribution is also referred to as logistics.
• The four components of physical distribution are:
  • Transportation
  • Warehousing
  • Inventory management
  • Order processing

Vendors and Carriers

• Vendors are suppliers or sellers of products or services.
• In the context of physical distribution, vendors refer to the suppliers of products being transported and distributed.
• A carrier is a company or individual responsible for transporting goods from one location to another.
• Examples of carriers include:
  • Shipping companies
  • Trucking companies
  • Courier services

Inventory Management

• Inventory refers to the stock of products or materials held by a business for sale or production.
• Inventory includes both:
  • Finished goods ready for distribution
  • Raw materials

Modes of Transportation

• There are five modes of transportation commonly used in physical distribution:
  • Road (trucks)
  • Rail
  • Air
  • Water (ships)
  • Pipeline
• Advantages and disadvantages of each mode of transportation:
  • Road (trucks):
    • Flexibility and accessibility
    • Traffic congestion and limited capacity
  • Rail:
    • Cost-effective for long distances
    • Limited accessibility and fixed routes
  • Air:
    • Fast and efficient for long distances
    • Expensive and limited capacity for bulky goods
  • Water (ships):
    • Cost-effective
    • Slow and dependent on weather conditions
  • Pipeline:
    • Not mentioned in the provided text