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Uses a single outlet in a fairly large geographic area to distribute a product
Appropriate for expensive, high-quality products purchased infrequently
Physical Distribution in Supply-Chain Management
Physical Distribution (Logistics)
Activities used to move products from producers to consumers and other end users
Order processing • Inventory management
Material handling • Warehousing
The contracting of physical distribution tasks to third parties with specialized logistics skills who do not have managerial authority within the marketing channel
Proportional Cost of Each Physical Distribution Function as a Percentage of Total Distribution Costs FIGURE 14.4 Source: Herbert W. Davis and Company, Fort Lee, NJ. “Logistics Cost and Service, 2000,” Reprinted by permission of Herbert W. Davis and Company.