Question

Explain the components of Physical distribution.

Answer 1

Components of Physical Distribution

Physical distribution refers to the set of activities concerned with the efficient movement of goods from the point of production to the point of consumption. The main components are:

1. Order Processing:

This involves receiving and handling customer orders. It includes checking product availability, preparing invoices, and arranging for dispatch. Fast and accurate order processing improves customer satisfaction and ensures timely delivery.

2. Transportation:

Transportation is the physical movement of goods from manufacturers to consumers. It affects the cost, speed, and reliability of delivery. Modes include roadways, railways, airways, and waterways, depending on the nature and urgency of the goods.

3. Warehousing:

Warehousing involves storing goods safely until they are needed. It helps in maintaining steady supply, managing seasonal demands, and reducing risk of spoilage or damage. Modern warehouses also provide value-added services like packaging and labeling.

4. Inventory Control:

Inventory control ensures that the firm maintains an optimum level of stock. Holding too much inventory increases storage cost, while too little can lead to stockouts and customer dissatisfaction. Effective inventory control balances both.

Conclusion: All components of physical distribution work together to ensure that the right product reaches the right customer at the right time and cost.