(a) Place/Physical Distribution: The physical handling and movement of goods from the place of production to the place of distribution is referred to as physical distribution.
(b) Components of physical distribution are:
(i) Order processing: Products flow from the producers to the customers, while orders for products flow in reverse direction i.e., from the customers to the producers.
It is necessary that the products ordered by customers must reach them in time, in right quantity and as per specifications which is ensured by effective physical distribution.
(ii) Transportation: Products reaches to the consumers scattered all around through transportation.
It makes goods available in the market, without which goods cannot be sold.
(iii) Warehousing: There is a time lag between production and sales of goods. Warehousing helps in stabilizing prices by checking fluctuations. It also facilitates regular and even supply of products throughout the country and throughout the year.
(iv) Inventory control: High level of inventory leads to high cost because more capital, and stock, is tied up in the business. Hence, an optimum level of inventory needs to be maintained through a good inventory control system.
