Page 195 - DMGT551_RETAIL_BUSINESS_ENVIRONMENT

Retail Business Environment

Notes The following Figure 10.3 shows components of customer logistics system.

Figure 10.3: Customer Logistics

Transportation
Inventory Management
1. Service selection
1. Short-term sales
Warehousing 2. Freight consolidation forecasting

1. Space determination 3. Carrier routing 2. Product mix at stocking
points
2. Stock layout and design 4. Vehicle scheduling 3. Number, size and location of
3. Stock placements 5. Claims processing stocking points
6. Freight rate and quality of 4. Just in time (JIT) or push or

service. pull strategies.

Material Handling
Order Processing
1. Equipment Selection
1. Order Information
2. Equipment Customer transmittal methods
Replacement
Logistics 2. Ordering intervals.

Packaging Information Maintenance
1. Collection
1. Handling
2. Storage 2. Data Analysis and Control
Procedures
3. Protection from Loss and
Damage

Self Assessment

Fill in the blanks:
1. Customer logistic involves a seven ….........………. framework.
2. Final inspection and testing are usually performed before …………………. the product to
the customer.
3. ………………………… system consists of a single resource plan, ordering and payment
system that makes it possible to work successfully.

4. ……………………………. analyses the trends of all outgoing shipments from distribution
centers to all dealers and of inventory movements at factory warehouse.
5. The ………………… concept is based on a total system view of the material and goods
flow activity from the source of supply to the final point of consumption.

10.2 Distribution Process

Physical distribution activities have recently received increasing attention from business
managers, including small business owners. This is due in large part to the fact that these
functions often represent almost half of the total marketing costs of a product. In fact, research
studies indicate that physical distribution costs nationally amount to approximately 20 percent
of the country’s total Gross National Product (GNP). These findings have led many small
businesses to expand their cost-cutting efforts beyond their historical focus on production to
encompass physical distribution activities. The importance of physical distribution is also based

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