Physical Distribution and Supply
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Questions and Answers

What is the primary reason why manufacturers extend their market?

  • To gain economies of scale in manufacturing and improve profitability (correct)
  • To localization of their production
  • To reduce the quality of their products
  • To restrict their potential for growth and profit
  • What does manufacturing add to a product?

  • Emotional value
  • Form value (correct)
  • Social value
  • Place value and time value
  • What is the primary purpose of distribution?

  • To reduce the quality of a product
  • To increase the price of a product
  • To add form value to a product
  • To add place value and time value to a product (correct)
  • What is an example of a channel of distribution?

    <p>Producer to wholesaler to retailer to consumer</p> Signup and view all the answers

    Why do market characteristics influence the logistics system?

    <p>Because they affect the location of distribution centers</p> Signup and view all the answers

    What are the two main functions of material movement?

    <p>Physical supply and physical distribution</p> Signup and view all the answers

    What is an example of a product characteristic that affects logistics?

    <p>Weight</p> Signup and view all the answers

    Who is responsible for the physical distribution of goods?

    <p>The distribution department</p> Signup and view all the answers

    What is the primary function of the transaction channel?

    <p>To negotiate, sell, and contract</p> Signup and view all the answers

    Why does a florist selling a perishable product use their own trucks?

    <p>Because the product is perishable and needs to be delivered locally</p> Signup and view all the answers

    What is the difference between moving iron ore and moving sheet steel?

    <p>The logistics problems are different</p> Signup and view all the answers

    What is an example of an intermediary in the channel of distribution?

    <p>A wholesaler</p> Signup and view all the answers

    What is the main difference between physical supply and physical distribution?

    <p>The bulk and physical condition of raw materials and finished goods</p> Signup and view all the answers

    What is the channel of distribution?

    <p>The route taken by goods from the producer to the consumer</p> Signup and view all the answers

    Who may pay for the cost of physical supply, depending on the conditions of sale?

    <p>Either the supplier or the customer</p> Signup and view all the answers

    What is the primary function of the distribution channel?

    <p>To transport goods from the producer to the consumer</p> Signup and view all the answers

    Study Notes

    Physical Distribution

    • Physical distribution is the movement and storage of finished goods from the end of production to the customer.
    • It involves the movement of materials from the producer to the consumer through distribution centers, wholesalers, and retailers.
    • The path in which the goods move is called the channel of distribution.

    Channels of Distribution

    • A channel of distribution is one or more companies or individuals who participate in the flow of goods and/or services from the producer to the final user or consumer.
    • Intermediaries are companies or individuals who distribute some or all of a company's products to the final consumer.
    • Examples of intermediaries include wholesalers, agents, transportation companies, and warehousers.

    Transaction and Distribution Channels

    • The transaction channel is concerned with the transfer of ownership, negotiating, selling, and contracting.
    • The distribution channel is concerned with the transfer or delivery of the goods or services.
    • The same intermediary may perform both functions, but not necessarily.

    Physical Distribution vs. Physical Supply

    • Physical supply is the movement and storage of goods from suppliers to manufacturing.
    • Physical distribution and physical supply have different logistics problems, particularly in terms of bulk and physical condition of raw materials and finished goods.

    Importance of Physical Distribution

    • Physical distribution is vital in our lives, as it allows manufacturers to extend their market and gain economies of scale in manufacturing.
    • A well-run distribution system is necessary to extend markets, reduce the cost of purchases, and improve profitability.
    • Distribution adds place value and time value by placing goods in markets where they are available to the consumer at the time they want them.

    Factors Affecting Physical Distribution

    • The channels of distribution used by the firm.
    • The types of markets served.
    • Market characteristics, such as geographic dispersion, number of customers, and size of orders.
    • Product characteristics, such as weight, density, fragility, and perishability.
    • The type of transportation available to move the material.

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    Description

    Learn about the movement of materials, including physical supply and physical distribution, and how costs are passed on to customers.

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