1 1 Unit 7 - Chapter 22 Physical Distribution. 2 »The process of transporting, storing, and handling goods to make them available to customers »Third.

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Presentation transcript:

1 1 Unit 7 - Chapter 22 Physical Distribution

2 »The process of transporting, storing, and handling goods to make them available to customers »Third largest expense for most businesses

3 Functions of Physical Distribution 1. Transportation 2. Order Processing 3. Storage 4. Stock Handling 5. Inventory Control

4 Transportation »Moving a product from the place where it is made to the place where it is sold

5 1. Trucking »Advantages »convenient »require less protective packaging »rapid deliveries »reduces inventory costs »Disadvantages »possible shipment delays »long distances - costly

6 Types of Truckers »Common Carriers »Contract Carriers »Private Carriers »Exempt Carriers

7 Trucking Video »Trucking in Australia (2:43) » science&bcpid= &bclid= http:// science&bcpid= &bclid=

8 2. Railways »Advantages »large quantities = lower costs »few delays »70% less energy than a truck »Disadvantages »lack of flexibility due to location

9 Railways »Ton-mile: movement of one ton (2,000 lbs) of freight one mile »Carload: minimum number of pounds of freight needed to fill a boxcar

10 3. Waterways or Marine Shipping »Advantages »low cost »Disadvantages »slow »lack of flexibility to travel inland »weather delays

11 Waterways »Internal Waterways (across rivers, lakes) »Intracoastal Waterways (between ports, same coast) »International Waterways (across oceans)

12 4. Pipelines »Advantages »lower long-term costs »dependable »Disadvantages »high initial costs »risk of breakage or leaking »costs for any damages

13 Pipelines »Used to transport oil and natural gas Fun Fact: There are more than 200,00 miles of pipeline in the US

14 5. Air Transportation »Advantages »SPEED »reduces storage & inventory expenses »Disadvantages »Costs (2x truck rates) »delays

15 Other Transportation Carriers »U.S. Postal Service »Express Carriers »Bus Package Carriers »Freight Forwarders

16 Warehousing or Storage »Holding goods until they are sold

17 Warehousing or Storage »Reasons for Storing Goods »sell to customers »surplus of goods »stabilize prices »obtain discounts »faster delivery

18 Warehousing »Private - company owned »Public - rent space to others »Bonded - pay a federal tax »Distribution Centers - sorting and moving products

19 Fedex Case Study »Spend 5 minutes reading the case study on Fedex »Note what the distribution strategies are for some of their customers

20 Video »Ice Road Truckers – Dash for the Cash » ceroadtruckershttp:// ceroadtruckers