Describe the principle of differentiated distribution. Explain how it is illustrated in the following situations:

a. Total distribution costs are minimized if back orders on field warehouse inventories are filled from plant inventories. Premium transportation is used to ship back orders directly from plant to customers.

b. The product items stocked in a warehouse are grouped so that different stock availability levels are set for each of the groups.

c. All products are grouped according to an ABC classification scheme, where A items have high sales volume, B items have moderate sales volume, and C items have low sales volume. A items are stocked in field warehouses, B items are stocked in regional warehouses, and C items are stocked only at plant locations.

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Answer of all parts are given below Differentiated distribution is that distribution which is done d... View the full answer