question_answer 17)

Explain briefly the components of physical distribution.

Answer:

The main components of physical distribution are as follows (i) Order Processing If a firm takes more time to process the order, then the consumer remains dissatisfied. Therefore, order processing has to made faster by using information technology. (ii) Inventory Control Inventories ensure the availability of the product as and when consumer demand arises. There are various factors which influence a firm decision regarding the level of inventory e.g., degree of accuracy of sales forecast, cost of blocking of the working capital etc. (iii) Warehousing It refers to the storage of goods from the time of production to the time of consumption. Warehousing is important as it creates time utility. (iv) Transportation It creates place utility. It refers to the carrying of raw materials or finished goods from one place to another important thing to be kept in mind is that the value transportation should be greater than the cost of transportation.