NIOS Class 10 Logistics & Supply Chain Management Chapter 17 Distribution and Planning Strategy

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NIOS Class 10 Logistics & Supply Chain Management Chapter 17 Distribution and Planning Strategy

Also, you can read the NIOS book online in these sections Solutions by Expert Teachers as per National Institute of Open Schooling (NIOS) Book guidelines. These solutions are part of NIOS All Subject Solutions. Here we have given NIOS Class 10 Logistics & Supply Chain Management Chapter 17 Distribution and Planning Strategy, NIOS Secondary Course Logistics & Supply Chain Management Solutions for All Chapters, You can practice these here.

Distribution and Planning Strategy

Chapter: 17

INTEXT QUESTIONS 17.1.

1. The quote “Physical distribution involves the management of physical flow of products and establishment and operation of flow systems” is put forward by Philip Kotler.

(A) True.

(B) False.

Ans: (B) False.

2. According to statistics, around __________ products of coca cola sold every day around the world.

Ans: 1.9 billion.

3. Distribution does not connect with the nature of the product you produce.

(A) True.

(B) False.

Ans: False. 

INTEXT QUESTIONS 17.2

1. __________ is a key department as they are the nervous system of the company.

Ans: Customer Service.

2. Water carriers are cost efficient but takes long transit time

(A) True.

(B) False.

Ans: (A) True.

3. __________ is a favoured transportation mode used by all business sectors.

Ans: Trucking.

4. Warehouses are the key to hold the finished safe and move out if __________ arises.

Ans: Demand. 

INTEXT QUESTIONS 17.3

1. Expand FMCG.

Ans: Fast Moving Consumer Goods.

2. The purchase of wholesalers and retailers are probably the same which differs in product quantity.

(A) True.

(B) False.

Ans: (A) True.

3. Distributors provide huge discounts to its customers.

(A) True.

(B) False.

Ans: (A) True.

4. __________ payment is preferred in ecommerce businesses

Ans: Digital Transactions.

INTEXT QUESTIONS 17.4

1. E-Commerce platforms adapt direct distribution strategy.

(A) True.

(B) False.

Ans: (A) True.

2. __________ distribution channel is long and inter linked with various departments.

Ans:  Indirect. 

3. Which of the below options are examples of intensive distribution?

(A) Cooling Glasses.

(B) Laptops and mobiles.

(C) Watches.

(D) All the above.

Ans: (D) All the above.

4. Companies using exclusive distribution has many outlets in the city.

(A) True.

(B) False.

Ans: (B) False.

INTEXT QUESTIONS 17.5

1. E-commerce platforms reduce the participation of intermediaries.

(A) True. 

(B) False.

Ans: (A) True. 

2. To reduce the shipping error__________ department plays an important role.

Ans: Customer Service.

3. __________ cause huge loss to the company.

Ans:  Excessive Goods.

4. Expand ERP.

Ans: Enterprise resource planning.

TERMINAL EXERCISE

1. Explain the Physical Distribution Process.

Ans: Physical distribution refers to the movement of finished goods from a company’s distribution and fulfilment network to the end user. In ecommerce, physical distribution involves several ecommerce supply chain activities including warehousing, inventory control, order processing, retail fulfilment, and shipping.

2. List out the components of Physical Distribution.

Ans: The components of Physical Distribution are:  

(i) Customer Service: Customer service is the important department as it forms the bloodline of the company. It is the process of providing assistance and support to the customers who have availed the product or service from the company. Customer satisfaction is very important in any business and success of a business fully depends on timely customer service. Responding to customers in an effective way and providing the correct data to other departments to deliver the product in the right time to the right place and to the right person holds the key to the whole activity. With the right adaptive technology and tracking options it can be achieved.

(ii) Transportation: Transportation is concerned with movement of people and goods from one place to another and is one of the most concentrated factors in all the sectors of the world. The cost factor and mode of distribution is the base for other departments to operate, which basically functions on cost and commodity to be transported. There are wide variety of transportation models available with each one having its own advantages and limitations which are discussed below:

(a) Trucking Flexible and Growing: It is the most favoured transportation mode used by all business sectors and preferred by large scale companies too. It is beneficial in such a way that it is able to deliver the goods quickly to almost all the parts in the country, allowing fast and frequent movement from one place to another compared to any other mode. Trucks are majorly used for transactions that can carry large amounts of goods. Due to its high transportation cost, mostly perishable and high value items are shipped in air mode. Most of the medium business companies also use air mode for improved business sustainability

(b) Water Carriers Slow But Inexpensive: Ships can carry tons of load at a very low cost but the transit time from one place to another is high, only products that are durable loaded in ships and inland movements use small ships for transit.

(c) Water Carriers Slow But Inexpensive: Ships can carry tons of load at a very low cost but the transit time from one place to another is high, only products that are durable loaded in ships and inland movements use small ships for transit.

(d) Railroads Long Distance Shipping: Railroads are efficient in transporting bulk goods for long distance purposes where mainly commodities like coal, chemicals, and food grains are Transported. 

(e) Pipelines—Specialised Transporters: Pipelines are used to transport natural gas, petrol and diesel, chemicals from ships to port and from port to remote areas in an efficient way.

(f) Warehousing: The process of storing the goods in a specific place for a duration is known as warehousing. Placing Warehouses at strategic locations helps in movement of goods easier and helps in delivery on time. Warehouses are the key to hold the finished goods safely and move out if demand arises and provide customers what they want on time. Goods are kept in warehouses to make more profits at the same time to meet customer demand, and maintain stock accordingly.

(g) Order Processing: Order processing is crucial in distribution because wrong order processing and misconceptions will lead to wrong delivery and dissatisfaction to the customers. When order processing is done there are many things that come along with it which includes inventory, quantity and mode of transportation and so on, where any wrong information can lead to serious issues including bad customer satisfaction and reduced profits.

(h) Protective Packaging and Materials Handling: Another important factor here is  how you handle the materials and  packaging. It differs on the quantity, nature of the product, size and weight of the product, mode of transportation involved during transit. Any wrong packaging or loose packing involved, it not only affects that particular product but also other goods in transit which is a total loss to the company.

3. Mention the different modes of Transportation.

Ans: The different modes of Transportation are: 

(i) Flexible and Growing: It is the most favoured transportation mode used by all business sectors and preferred by large scale companies too. It is beneficial in such a way that it is able to deliver the goods quickly to almost all the parts in the country, allowing fast and frequent movement from one place to another compared to any other mode. Trucks are majorly used for transactions that can carry large amounts of goods. Due to its high transportation cost, mostly perishable and high value items are shipped in air mode. Most of the medium business companies also use air mode for improved business sustainability.

(ii) Water Carriers Slow But Inexpensive: Ships can carry tons of load at a very low cost but the transit time from one place to another is high, only products that are durable loaded in ships and inland movements use small ships for transit.

(iii) Water Carriers Slow But Inexpensive: Ships can carry tons of load at a very low cost but the transit time from one place to another is high, only products that are durable loaded in ships and inland movements use small ships for transit.

(iv) Railroads Long Distance Shipping: Railroads are efficient in transporting bulk goods for long distance purposes where mainly commodities like coal, chemicals, and food grains are Transported. 

(v) Pipelines Specialised Transporters: Pipelines are used to transport natural gas, petrol and diesel, chemicals from ships to port and from port to remote areas in an efficient way.

4. Prepare a chart on various functions of physical distribution.

Ans: Physical distribution is defined as the group of activities that deals with the supply of finished product from the finished product to the end consumers. The distribution channel includes both the wholesale and retail channels. It also includes several critical decision making areas like customer service, materials, inventory, packaging of the finished product, order processing and fulfilment, logistics, etc. 

5. Explain on different channels of distribution.

Ans: The different channels of distribution are:   

(i) Wholesalers: Wholesalers are the business people who purchase items in bulk from the manufacturers and sell them in retail. By purchasing bulk, wholesalers get the product at a discounted price and sell it to retailers which are the next channel  of distribution. The above is the example of Adani Wilmar, which is a FMCG – Fast Moving Consumer Goods company whose products are sold on a wholesale basis.

(ii) Retailers: Retailers are the customers of wholesalers, who do the same work as wholesalers but they provide various offers to their customers. The customers of retailers will buy in bulk but not like wholesalers. Best example of retail shops is Big Bazaar, where you can find all the products you wish under a single roof.

(iii) Distributors: They are the closest one to the customers, where they sell their product to customers without any further intermediaries. The best examples are local petty shops and grocery shops where you are the direct consumer and they are the direct sellers. Here the product diversification is normal but the options of discounts are very low or at times they provide you offers and discounts less than wholesalers and retailers.

(iv) E-Commerce: E-commerce companies are those who make use of software and technology, to directly sell the goods to the customers. Best example we all know is Amazon and Flipkart, where most of our products which we use currently will be bought from them. They sell the products to individual consumers whereas in other distribution channels, goods are procured for large consumers irrespective of any criteria. In E Commerce we can get offers for the  products we purchase through festive sales, credit card and debit card offers and mostly Digital Transaction is done for the products we buy. 

6. Outline the different stages in distribution: 

Ans: The different stages in distribution are: 

(i) Manufacturer/Producer: The process begins with the manufacturer or producer of the product. This could be a company that designs, creates, or assembles the product.

(ii) Wholesalers: Wholesalers are the business people who purchase items in bulk from the manufacturers and sell them in retail. By purchasing bulk, wholesalers get the product at a discounted price and sell it to retailers which are the next channel  of distribution. The above is the example of Adani Wilmar, which is a FMCG – Fast Moving Consumer Goods company whose products are sold on a wholesale basis.

(iii) Retailers: Retailers are the customers of wholesalers, who do the same work as wholesalers but they provide various offers to their customers. The customers of retailers will buy in bulk but not like wholesalers. Best example of retail shops is Big Bazaar, where you can find all the products you wish under a single roof. 

7. What are the challenges in distribution?

Ans: The challenges in distribution are Running a business is not an easy task as it involves various challenges. There  are many challenges in the distribution sector also. Let us discuss the common challenges faced by the distributors.

(i) Inventory Management: Inventory management is the process of ordering, storing, and movement of finished goods. It is one of the major challenges faced by the distributors where miscalculation of data, wrong data entry, less movement in particular type of product and other factors put together plays a crucial role. Maintaining a poor inventory leads to failure in the movements of goods already in stock and not maintaining the goods that are to be shipped immediately resulting in poor customer satisfaction and loss to the company.

(ii) E-commerce Platforms: To reduce the commission among the i n t e r m e d i a r i e s , manufacturers are selling their goods directly to their customers through E Commerce Platforms in order to increase their reach and revenue, which is a threat to the distribution and wholesale network. But it requires a greater web presence and backend team to manage all the work which all companies cannot adapt to.

(iii) Shipping Errors and Returns: Customer service department plays a main role here. With e-commerce booming and competitors increasing day by day, it is necessary to maintain a good customer service department and keep a track on records in order to survive in the market. Improper customer service leads to wrong product delivery, late delivery, etc which may reduce the potential of the company in the market.

(iv) Slow and Outdated Reporting: To run the business smoothly, one must have the right stock and inventory planning. Excessive inventory makes the product unsold and covers the area not allowing other goods to enter which are in need to be delivered. Those simple aspects may cause serious errors resulting in huge losses and not meeting the demands of the customer. This error can be rectified through periodical reporting and updates.

(v) Outdated Software: With the ecommerce and IT sector booming, one should update the company software and adapt to new technologies on a periodic basis in order to reduce the error and improve the profit margin. It is not easy to make change overnight but companies trying to update themselves will definitely sustain the competition in the current scenario. Adapting WMS – warehouse management software, ERP – Enterprise Resource Planning and so other software are available and choosing the right software for your companies improves the performance.

8. Explain advantages & disadvantages of different channels of distribution.

Ans: Advantages & disadvantages of different channels of distribution are: 

(i) Wholesalers:

Advantages:

(a) Discount and allowances are high.

(b) Advertisement and marketing costs are low.

(c) Fixed profit margin.

(d) Competition is less.

(e) Link between manufacturers and retailers.

Disadvantages:

(a) Huge investment is required.

(b) More space is required.

(c) Profit margin is less.

(ii) Distributors

Advantages:

(a) Well established network.

(b) High returns.

(c) Fulfilling market requirement.

(d) Reduced cost of sales.

(e) Control in market.

Disadvantages:

(a) Increase in costs of product.

(b) Fewer market coverage.

(c) More time required for market coverage.

(d) Lack of customer service.

(e) Loss of profit margin.

(iii) Retailers:

Advantages:

(a) Convenience to customers.

(b) Builds relationships with customers.

(c) Easy returns.

(d) High customer satisfaction.

(e) No shipping costs.

Disadvantages:

(a) High costs to space.

(b) Delay in orders.

(c) Inventory issues.

(d) High operating costs.

(e) Labour.

(iv) E-Commerce:

Advantages:

(a) Large market coverage.

(b) Tracking options.

(c) Lower investment costs.

(d) Can sell a large number of diversified products.

(e) Increased profit.

Disadvantages:

(a) Need internet access.

(b) Theft of product.

(c) Payment frauds and issues.

(d) High complexities during order. 

(e) Security issues.