Which of the following distribution approaches for a low-volume, high-variety product line typically will result in the highest level of customer service and the lowest total distribution costs?
Which of the following distribution approaches for a low-volume, high-variety product line typically will result in the highest level of customer service and the lowest total distribution costs?
For a low-volume, high-variety product line, direct shipment from plant to customers typically results in the highest level of customer service and the lowest total distribution costs. This is because direct shipment eliminates the need for intermediate storage, handling, and redistribution, thus reducing warehouse costs and minimizing the handling time, which improves customer service. Other options would either increase costs or complicate the distribution process without providing significant benefits for this type of product line.
Doesn't direct shipment increase outbound distribution costs?
The question is about "total distribution cost" which includes warehouse cost. Warehouse cost can be eliminated when direct shipment
For a low-volume, high-variety product line, shipping from a central distribution warehouse typically results in the highest level of customer service and the lowest total distribution costs. This approach allows the company to consolidate inventory in a single location, facilitating better inventory management and control.A central warehouse can stock a wide variety of products, ensuring availability and quick response to customer orders. It also allows for more efficient use of transportation resources by consolidating shipments, which reduces transportation costs.