PHYSICAL DISTRIBUTION MANAGEMENT

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Logistics activities have long been categorized into two primary areas–materials management on the inbound side, and physical distribution management on the outbound side. Materials management is concerned with the procurement, transportation, and storage of raw materials, purchased components, and subassemblies entering the manufacturing process, and manages the flow of goods within and through the manufacturing process. Physical distribution focuses on the transportation and storage of finished products from point of manufacture to where the customers wish to acquire them. The key to physical distribution is to meet or exceed the service expectations of customers at the lowest possible costs. Thus, the traditional key to successful physical distribution management has been to match inventory and transportation management to customer needs. The tradeoffs between inventory/transportation costs and customer service drive physical distribution decisions. T ...