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Physical Distribution Marketing Co-Op Physical Distribution Marketing Co-Op

Physical Distribution Marketing Co-Op - PowerPoint Presentation

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Uploaded On 2018-12-17

Physical Distribution Marketing Co-Op - PPT Presentation

What is Physical Distribution The key link between a business and its customers also known as logistics Logistics the process of physically delivering goods to customers Comprises ALL ID: 742796

goods transportation distribution shipping transportation goods shipping distribution transport service carriers freight form trucking inventory advantages destination provide disadvantages

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Slide1

Physical Distribution

Marketing Co-OpSlide2
Slide3
Slide4

What is Physical Distribution?

The key link between a business and its customers – also known as logistics

Logistics

– the process of physically delivering goods to customers

Comprises

ALL

activities that help to ensure the

right

amount of a product is delivered to the right place at the right timeSlide5
Slide6

Distribution Careers

Supply Chain and Distribution Opportunities at TargetSlide7

Inventory

Inventory – All the goods shipped and stored by a business before it is soldSlide8

Distribution Activities

Ordering Processing

placing and organizing product orders

Transporting -

moving goods from sellers to buyers

Storing -

holding the goods while they await transport

Stock Handling -

shipping, receiving, and checking goods

Inventory Control –

controlling and cataloging merchandise while in storageSlide9

It can be Costly!!

Physical Distribution is the 3rd largest expense for most businesses

Surpassed only by the cost of material and laborSlide10

Types of Transportation Systems

Trucking

Railroads

Marine Shipping

Pipelines

Air Cargo ServicesSlide11
Slide12

Trucking

Types of Carriers

Common Carriers

– Provide transportation services to any business for a fee

Accounts for 1/3 of all motor freight

Ex: UPS, Fed Ex

Contract Carriers

– for-hire carriers that provide equipment and drivers for specific routes between the carrier and the shipper

Ex: Estes, Pitt Ohio Slide13

How UPS WorksSlide14

Trucking

Types of Carriers

Private carriers

– transport goods for an individual business

- Businesses can lease equipment or own their own fleet

Slide15

Trucking

Mostly commonly used mode of transportationCarry high value products that are expensive or impossible to keep in inventory

Ex: Produce

Slide16

Trucking

Intermodal Transportation – combines two or more transportation modes to maximize the advantages of each

Interstate Transportation –

when distribution crosses over state lines Slide17

Railroads

Most useful for delivering bulky freight

Coal Chemicals

Grain Lumber

Steel Farm Equipment

Shippers pay a lower rate if they fill an entire boxcar

Carload

– the minimum number of pounds of freight needed to fill a boxcar

Slide18

Railroad Transporting

Advantages

Very low cost

Use 50-70% less energy than trucking

Seldom slowed or stopped by bad weather

Disadvantages

Lacks flexibility

Can only be delivered to stations along designated rail lines

Require another form of transportation to get goods to storage locationSlide19

Marine Shipping

Barges and container ships transport merchandise around the world

Regulated by The United States Maritime CommissionSlide20

Marine Transporting

Advantages

Cheapest form of transportation

Disadvantages

Slowest form of transportation

Require another form of transportation to get goods to storage location

It is affected by bad weather and seasonal conditionsSlide21

Pipelines

Advantages

Best safety record among all major transportation systems

Suffer minimal damage or theft

Are not affected by bad weather

Disadvantages

High initial investment, but lower operational costs

Products move slowly

Most commonly used to transport oil and natural gas

The risk of a pipeline leak are low, but if one does occur, the damage to the environment can be extensiveSlide22

Air Cargo Service

Advantages

The speediest form of transport

Reduces inventory expenses and storage costs

Disadvantages

Most costly form of transport (twice as costly as motor transport)

Can easily be delayed by bad weather and mechanical issues

Represents less than

1%

of the total freight shipped

Mostly used for high-value, low-weight, time-sensitive items – like overnight mail Slide23

Transportation Service Companies

U.S. Postal Service

Ships small packages by parcel post or first class mail

For an extra fee, packages can be insured against loss or damage

Bus Package Carriers (Greyhound)

Provide transportation service for packages under 100 pounds

Provide same-day or next-day service to cities and towns along scheduled route

Cost – based on weight of package and distance traveledSlide24

Transportation Service Companies

Express Delivery Service

Specialize in delivering small, lightweight packages and high priority mail (less than 150 pounds)

Rates based on speed of delivery, size and weight of package, type of delivery required

Freight Forwarders

Private companies that combine less-than-truckload shipments and deliver them to the destination

Combining multiple shipments helps to reduce rates for shippersSlide25

SHIPPING TERMS

F.O.B. (free on board) destination

the title of ownership remains with the seller until the goods reach destination

F.O.B. shipping point

the buyer pays the shipping costs and is responsible for losses

F.O.B. factory freight prepaid

seller pays shipping charges

goods become the property of the buyer at the factory

F.O.B. destination charges reversedmerchandise becomes the buyer’s only when goods are receivedbuyer pays for shipping charges