Final answer:
Physical Distribution (PD) involves transporting finished goods from the manufacturer to the customer and optimizing the process to minimize costs. There are different systems or channels for distribution, and the cost of distribution depends on various factors.
Step-by-step explanation:
The concept of Physical Distribution (PD) refers to the process of transporting finished goods from the manufacturer to the customer. It involves activities such as warehousing, transportation, packaging, and order fulfillment. PD aims to ensure that the right products are delivered to the right place, at the right time, and in the right condition, while minimizing distribution costs.
There are various systems or channels that can be used for physical distribution. These include direct distribution, where goods are sold directly from the manufacturer to the customer; indirect distribution, where intermediaries such as wholesalers or retailers are involved in the distribution process; and multiple channels, where a combination of direct and indirect distribution methods are utilized.
The cost of distribution for a given sales level depends on various factors such as the volume of goods being transported, the distance traveled, the mode of transportation used, and the efficiency of the distribution system. By optimizing the physical distribution process, businesses can improve customer satisfaction, reduce delivery times, and enhance their overall competitiveness.