Lecture 2B Flashcards
(11 cards)
What is a Distribution System
A distribution system is a network of two elements: distribution channels arrangements and logistics arrangements.
Distribution Channel
A distribution channel is the linear or vertical arrangement through which a product passes from producer to the consumer
Channel Strategy Decision
Channel strategy decision deals with the length and composition of the distribution channel.
Logistics Strategy Decisions
This deals with the physical movement of a product and information about it.
Four main aspects of the logistics decision
- Warehousing
- Inventory management
- Transportation
- Order processing (LIM)
Spatial Discrepancy Reduction
Intermediaries in a channel help to reduce the spatial discrepancy between manufacturer and consumer.
Assortment Discrepancy Reduction
Distribution channels reduce assortment discrepancy when wholesalers and retailers offer a wide variety of products at one location.
Warehousing
location and size of warehouses reduce place and temporal discrepancy.
Inventory management
This reduces temporal, form, and assortment discrepancies
Transportation
right transportation at the right time reduces place and time discrepancy.
Order-processing
reduces mainly time discrepancy.
