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Embed code for: 22 physical distribution
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CONNECT What channels of transportation are used to deliver your favorite products to you?
Describe the nature and scope of physical distribution.
Identify transportation systems and services that move products from manufacturers to consumers.
Name the different kinds of transportation service companies.
Success in today’s business environment requires companies to deliver products efficiently and effectively to their customers around the world.
Advantages and Disadvantages of Each Type of Transportation System
The Nature and Scope of Physical Distribution
Key link between a business and its customers
Goods can be stored in convenient locations
Also known as logistics
Each link in the system affects the other links
Needs to be as efficient and cost effective as possible
Activities for delivering the right amount of product to the right place at the right time.
Three Factors Affecting Transportation Costs
Types of Transportation Systems
Percentage of Freight Shipped by Each Type of Single-Mode Transportation in the United States
Trucking company that provides transportation services to any business in their operating area for a fee.
Types of Carriers
A for-hire trucking company that provides equipment and drivers for specific routes, per agreements between the carrier and the shipper.
A trucking company that transports goods for an individual business.
A trucking company that is free from direct regulation of rates and operating procedures.
Relationship Among the Different Types of Carriers
Advantages of Truck Transportation
Disadvantages of Truck Transportation
Convenient door-to-door delivery
Rapid delivery reduces the need for large inventories
Cost more than rail and water carriers
Susceptible to delays
Trains transport nearly 15 percent of the total ton-miles of freight shipped in the United States.
Rates charged for less-than-carload shipments are more expensive.
Movement of one ton (2,000 pounds) of freight one mile.
Minimum number of pounds of freight needed to fill a boxcar.
Advantages of Railroad Transportation
Disadvantages of Railroad Transportation
Requires less energy than motor carriers
Seldom slowed by bad weather
Lack of flexibility of delivery locations
Advantages of Marine Shipping
Disadvantages of Marine Shipping
Freight must be off-loaded onto railroad cars or motor carriers
Affected by bad weather
Advantages of Pipelines
Disadvantages of Pipelines
Low operational costs
Low instances of damage or theft
Not subject to weather delays
Leaks can damage the environment
Advantages of Air Cargo Services
Disadvantages of Air Cargo Services
Reduced inventory expenses and storage costs
Transportation Service Companies
Express Delivery Service
Bus Package Carriers
U.S. Postal Service
A private company that combines less-than-carload or less-than-truckload shipments from several businesses and delivers them to their destinations.
Descriptions of Each Type of Transportation Service Company
Explain why transportation is related to customer service.
Transportation is related to customer service because choosing the right mode of transportation can make a product more affordable for a customer or can make the product more desirable (for example, if it arrives faster or on time.)
Differentiate between common, contract, and private carriers.
Common carriers provide truck transportation services to any business in their operating area for a fee. Contract carriers are for-hire trucking companies that provide equipment and drivers for specific routes, according to agreements between the carrier and the shipper. Private carriers transport goods for an individual business.
List the benefits of intermodal transportation.
Intermodal transportation such as piggyback or fishyback services combine the advantages of truck transportation with the lower costs of rail and marine transportation.
CONNECT How might the law of supply and demand relate to inventory storage?
Explain the concept and function of inventory storage.
Identify the types of warehouses.
Discuss distribution planning for international markets.
Inventory storage allows a business to keep its products in a safe location until they are needed or ready to be sold.
Notes About Different Types of Warehouses
The Storage of Goods
Facilitates the movement of products through the distribution channel as products are sold
Products are stored until sold
Products are stored if production exceeds consumption
Products are stored safely and securely at convenient locations
Storage adds time and place utility to products
Internet-based stores require warehouse space
The holding of goods until they are sold.
A storage facility designed to meet the specific needs of its owner.
Types of Warehouses
A storage and handling facility offered to any individual or company that will pay for its use.
A warehouse designed to speed delivery of goods and to minimize storage costs.
A public or private warehouse that stores products requiring payment of a federal tax.
Name the Types of Warehouses
Five Types of Public Warehouse
Bulk Storage Warehouses
Cold Storage Warehouses
General Merchandise Warehouses
Household Goods Warehouses
Trace a Product Through the Entire Distribution Center Cycle
Distribution Planning for International Markets
Requires more planning
Export and import laws
Conflicting bureaucratic regulations
Foreign transportation systems are different with mixed reliability
Define These Trade Barriers
Explain the four reasons why merchandise is stored.
Students should list any four of these reasons for storing merchandise: facilitate delivery to purchaser, production has outpaced demand, products require seasonal storage, to take advantage of quantity purchases, and to be located close to purchasers.
List three services that might be offered at a public warehouse.
Students should list any three of these services that might be offered at a public warehouse: shipment consolidation, receiving, unloading, inspecting, reshipping, order filling, and truck terminal operation services.
Describe a bonded warehouse.
A bonded warehouse can be either a public or private warehouse that stores products that require the payment of a federal tax. Products cannot be removed until the required tax is paid.
uch as piggyback or fishyback services combine the advantages of truck transportation with the lower costs of rail and marine transportation.
The Storage o