For any business, the cost of transportation is normally the largest single
Item in the overall cost of physical distribution. It doesn’t necessarily
Follow, though, that a manufacturer should simply pick the cheapest
Available form of transportation. Many companies today use the total
Physical distribution concept, an approach that involves maximizing the
10 efficiency of physical distribution activities while minimizing their cost.
Often, this means that the company will make cost tradeoffs between the
Various physical distribution activities. For instance, air freight may be
Much more expensive than rail transport, but a national manufacturer
Might use air freight to ship everything from a single warehouse and thus
15 avoid the greater expense of maintaining several warehouses.
When a firm chooses a type of transportation, it has to bear in mind its
Other marketing concerns-storage, financing, sales, inventory size, and the
Like. Transportation, in fact, can be an especially important sales tool. If the
Firm can supply its customers’ needs more quickly and reliably than its
20 competitors do, it will have a vital advantage: so it may be more profitable
In the long rub to pay higher transportation costs, rather than risk the loss of
Future sales. In addition, speedy delivery is crucial, in same industries. A
Mail-order distributor sending fruit from Oregon to Pennsylvania needs the
Promptness of air freight. On the other hand, a manufacturer shipping
25 lingerie from New York to Massachusetts may be perfectly satisfied with
Slower (and cheaper) truck or rail transport.
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