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Physical distribution is the set of activities concerned with the 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 and includes such important decision areas as customer service, inventory control, materials handling, protective packaging, order procession, transportation, warehouse site selection, and warehousing. Physical distribution is part of a larger process called "distribution," which includes wholesale and retail marketing, as well as the
Functions of Physical Distribution
The key functions within the physical distribution system are:
Customer service—What level of customer service should be provided?
Transportation—How will the products be shipped?
Warehousing—Where will the goods be located? How many warehouses should be utilized?
Order processing—How should the orders be handled?
Inventory control—How much inventory should be maintained at each location?
Protective packaging and materials handling—How can efficient methods be developed for handling goods in the factory, warehouse, and transport terminals?
These components are interrelated: decisions made in one area affect the relative efficiency of others.
Should be the activies needed to supply finished products at every step, from the production line to the consumers. Steps include customer service, order processing, inventory control, logistics and packaging.
