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Question

Explain briefly the components of physical distribution.

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Solution

The main components of physical distribution are:

(i) Order Processing: A good physical distribution system should provide for an accurate and speedy processing of orders. In the absence of this, goods would reach the customers in wrong quality or quantity, resulting in dissatisfaction of customers.

(ii) Transportation: It means carrying raw materials and finished goods from one place to another. It helps in creating 'place utility', by making available the goods where they are required.

(iii) Warehousing: It refers to the act of storing and assorting products in order to create 'time utility'. It helps in proper placement of goods and providing facilities to store them so that they can be made available as and when demanded by the market.


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