Logistics System

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  • Amity Business School
  • Logistics System

    1. 1. Amity Business School MBA Class of 2010, Semester II Distribution & Logistics Management Ms.Vandana Gupta
    2. 2. <ul><li>LOGISTICS SYSTEM </li></ul>
    3. 3. <ul><li>“ Physical Distribution involves planning, implementing, and controlling the physical flow of materials and final goods, from point of use, to meet customer requirements at a profit.” </li></ul><ul><li> Kotler & Armstrong </li></ul>
    4. 4. MARKETING MIX PRODUCT MIX PLACE MIX PROMOTION MIX PRICE MIX PHYSICAL DISTRIBUTION CHANNELS OF DISTRIBUTION <ul><li>Transportation </li></ul><ul><li>Inventory Management </li></ul><ul><li>Materials Movement </li></ul><ul><li>Communicating </li></ul><ul><li>Order Processing </li></ul><ul><li>Retailer </li></ul><ul><li>Wholesaler </li></ul>Physical Distribution as a part of the Marketing Mix
    5. 5. <ul><li>The main constituents of Physical Distribution cost are: </li></ul><ul><li>PDC = T + W + S </li></ul><ul><li>Where PDC = Total Physical Distribution cost </li></ul><ul><li>T = Total Transportation Cost </li></ul><ul><li> W = Total Warehousing Cost </li></ul><ul><li> S = Total cost of the sales lost due to the non availability of product at the right time . </li></ul>
    6. 6. When a firm runs out of Stock, customers can Permanently Switch to a new Seller for all purchases Switch to new Seller while Merchandise Is not available Purchase a Substitute Product from The same seller Wait until Merchandise is available Most desirable action Least Desirable Action What happens when a firm has stock shortages
    7. 7. Role of Physical Distribution System <ul><li>Increased Market Share </li></ul><ul><li>Creation of Utilities </li></ul><ul><li>Price Stabilization </li></ul><ul><li>Improved consumer services </li></ul><ul><li>Cut in Distribution costs </li></ul>
    8. 8. Factors Governing Logistics System <ul><li>Distribution Channels </li></ul><ul><li>Component Availability </li></ul><ul><li>Market </li></ul><ul><li>Resource Position </li></ul><ul><li>Product </li></ul>

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