DISTRIBUTION DECISION By: Dr. Vidya Hattangadi

Logistics is the management of the flow of goods, information and other resources, including energy and people, between the point of origin and the point of consumption in order to meet the requirements of consumers. Physical distribution refers to the process of delivering products to the marketing channels and consumers. It takes care of functions such as transpiration, warehousing and inventory management. Physical distribution is the set of activities concerned with efficient movement of finished goods from the end of the production operation to the consumer. Physical distribution takes place within numerous wholesaling and retailing distribution channels.

Marketing logistics covers physical distribution plus party of the task of marketing channels, such as facilitate selling, provide distribution efficiency, break the bulk, and look after part of physical distribution, sub distribution, stock holding, and transforming static stock into operational stock. Supply Chain Management refers to the physical distribution and marketing logistics. It encompasses material management task as well. It refers to the entire business chain starting from procurement of inputs, inbound logistics, conversion of inputs into products, physical distribution i.e. outbound logistics, which takes the end product to the actual consumer.

Functions of physical distribution: Planning the entire distribution In-plant warehousing Transportation Field warehousing Receiving Handling Secondary transportation, secondary handling Inventory management at each level Order processing Accounting Communication

Functions of Transportation: Assessing the requirements at each stage Choosing transpiration mix Deciding the routing Preparing Operation plans Implementation Review Cost controlling

Functions of warehousing Confer place and time utility to the products To reduce transportation need wherever possible To add competitive advantage Balance demand and supply Become a stimulant for demand

Functions of Inventory Establish relationship between inventory purpose and inventory level Inventory should be maintained at finest level because Optimum inventory is compromise between cost and service.

Elements of inventory cost: Interest on capital locked in the inventory, warehouse rent, staff salaries, insurance, rates and taxes, stationary, postage charges, administrative cost, handling, loading and stacking cost, damages if any, order processing cost & Record keeping cost.

Functions of Marketing Channels Supply products with suitable assortment Provide salesmanship Help in price mechanism Look after part of physical distribution and financing Assist merchandising Provide market intelligence Act as change agent Take care of flows involved in distribution

Types of Marketing Channels Sole-selling agent Marketer C&F Agents Redistribution stockiest Semi-wholesaler Retailer Broker Franchiser Authorized representative Commission agent Jobbers