Www.mhhe.com/fourps Distribution Customer Service and Logistics For use only with Perreault/Cannon/McCarthy or Perreault/McCarthy texts. © 2008 McGraw-Hill.

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Presentation transcript:

Distribution Customer Service and Logistics For use only with Perreault/Cannon/McCarthy or Perreault/McCarthy texts. © 2008 McGraw-Hill Companies, Inc. McGraw-Hill/Irwin CHAPTER ELEVEN

CH 12: Retailers, Wholesalers & Their Strategy Planning Logistics customer service What it is Level to offer Cost JIT and EDI Transporting Transport modes Benefits and limitations Storing Inventory costs Storing facilities and distribution centers CH 11: Distribution Customer Service & Logistics CH 10: Place and Development of Channel Systems Marketing Strategy Planning for Place (Exhibit 11-1)

Physical Distribution Concept Focuses on the Whole Distribution System Info on Product Availability Order Processing Time Backorder Procedures Inventory Storage Order Accuracy Damage in Transit Online Status Information Advance Info on Delays Delivery Time Compliance with Customers Defect – Free Deliveries Factors Affecting PD Service Levels Factors Affecting PD Service Levels Handling Adjustments/ Returns

A Cost Comparison of Alternative Systems (Exhibit 11-4)

The Transporting Function Adds Value to a Marketing Strategy (Exhibit 11-5)

Which Transporting Alternative Is Best? (Exhibit 11-6)

Achieves Production Economies of Scale Keeps Prices Steady Needed When Production Doesn’t Match Consumption Builds Channel Flexibility The Storing Function and Marketing Strategy

Handling costs Cost of inventory becoming obsolete Cost of risks Cost of damage while in inventory Cost of storage facilities Interest expense & opportunity cost Interest expense & opportunity cost Interest expense & opportunity cost Interest expense & opportunity cost Total Inventory Cost (Exhibit 11-7) Total Inventory Cost Total Inventory Cost

Specialized Storing Facilities May Be Required (Exhibit 11-8)