Module4

Question 1

What is a distribution channel?

Answer 1

• A network of interdependent entities
• Makes a product or service available to end users

Question 2

What is a distribution mix?

Answer 2

• Combination of channels used by a seller
• Moves the product from manufacturer to end users

Question 3

What are intermediaries?

Answer 3

• Entities (e.g., wholesalers, retailers) that add value
• Help distribute products or services
• May or may not take ownership of goods

Question 4

Define wholesalers/distributors

Answer 4

• Wholesalers buy in bulk from manufacturers
• Distributors act as middlemen between manufacturers and business customers

Question 5

What are agents/brokers?

Answer 5

• Independent sales reps for multiple companies
• Work on commission, do not own goods

Question 6

List types of retailers

Answer 6

• Product line retailers: broad product lines
• Bargain retailers: wide ranges, discount houses, factory outlets
• Non-store/online: vending, door-to-door, online

Question 7

What is intensive distribution?

Answer 7

Strategy to place products in as many channels as possible

Question 8

What is exclusive distribution?

Answer 8

Exclusive rights granted to specific wholesalers/retailers in a region

Question 9

What is selective distribution?

Answer 9

• Use a limited number of wholesalers/retailers
• These partners give special attention to certain products

Question 10

Explain retail channel: Brick-and-mortar

Answer 10

Physical stores where customers walk in and buy

Question 11

Explain online channel

Answer 11

• Purchasing via websites or mobile apps
• Orders shipped to home or selected location

Question 12

Define multichannel distribution

Answer 12

• Separate channels (store vs. online) with different supply chains
• Different pricing or stock for each channel

Question 13

Define omnichannel distribution

Answer 13

• Integrated supply for store and online
• Shared platform and unified inventory visibility

Question 14

Examples of omnichannel logistics services

Answer 14

• Buy online, pick up in store
• Buy online, deliver home
• Return online or in store
• Flexible and agile system

Question 15

Compare online-only vs. multichannel distribution (general)

Answer 15

• Online-only: dedicated fulfillment centers, often free shipping
• Multichannel: leverage existing store network

Question 16

What is supply chain disintermediation?

Answer 16

• Removing middlemen
• End consumer buys directly from manufacturer

Question 17

How do distribution networks affect profitability?

Answer 17

• They impact both costs and customer experience
• Key driver of overall profitability

Question 18

Which two dimensions can evaluate distribution networks?

Answer 18

• Customer needs (service)
• Costs of meeting those needs

Question 19

Key customer service elements influenced by network design

Answer 19

• Response time
• Product variety
• Availability
• Experience
• Order visibility
• Returnability

Question 20

Key supply chain costs influenced by network design

Answer 20

• Facility costs
• Inventory costs
• Transportation costs

Question 21

What happens as the number of facilities increases?

Answer 21

• Facility costs rise
• Inventory costs rise
• Transportation costs generally decrease (until inbound costs dominate)

Question 22

Total logistics costs vs. number of facilities

Answer 22

• Forms a U-shape: decreases then increases
• There’s an optimal number of facilities

Question 23

When to add more facilities beyond cost-minimizing point?

Answer 23

Only if additional revenue from better responsiveness exceeds extra cost

Question 24

What is the cost-response time efficient frontier?

Answer 24

Curve showing trade-offs between responsiveness and logistics cost

Question 25

List 6 design options for physical distribution networks

Answer 25

- 1) **Manufacturer storage** (direct shipping) - 2) Manufacturer storage + **in-transit merge** - 3) **Distributor storage** + carrier delivery - 4) Distributor storage + **last mile** delivery - 5) Manufacturer/distributor storage + **customer pickup** - 6) **Retail** storage + customer pickup

Question 26

Briefly describe manufacturer storage with direct shipping

Answer 26

- Also called **drop shipping** - Inventory at **manufacturer** - **Retailer** handles order, manufacturer ships directly

Question 27

What is in-transit merge?

Answer 27

- **Combine** items from multiple sites into one delivery - Reduces number of **shipments** to customer

Question 28

Describe distributor storage with carrier delivery

Answer 28

- Inventory in **distributor warehouses** - Shipped via **carrier** to customers - Example: **Amazon**

Question 29

Describe distributor storage with last mile delivery

Answer 29

- Distributor/retailer handles **home delivery** - More **warehouses**, closer to customers - Example: **grocery home delivery**

Question 30

Explain customer pickup with manufacturer or distributor storage

Answer 30

- Customer orders **online** and **picks up** at designated sites - Inventory is stored at **manufacturer or distributor**

Question 31

Explain retail storage with customer pickup

Answer 31

- Inventory stored **locally** at **retail stores** - Customers can order online or **walk in**

Question 32

Value of distributors in the supply chain

Answer 32

- **Combine** products from multiple manufacturers - Lower **outbound** transport cost - **Aggregate** inventory for better efficiency

Question 33

Impact of online sales on response time

Answer 33

- Physical products: **longer** lead times - Information goods: **immediate** delivery

Question 34

Impact of online sales on product variety

Answer 34

- Easier to offer **larger selection** - **Inventory aggregation** possible

Question 35

Explain the 4-phase approach to network design decisions

Answer 35

- **Phase I**: Supply chain strategy - **Phase II**: Regional facility configuration - **Phase III**: Select desirable sites - **Phase IV**: Location choices

Question 36

What influences network design in Phase I?

Answer 36

- **Competitive strategy** - Available **capital** - Existing **facilities**

Question 37

Key tasks in Phase II (Define regional facility config.)

Answer 37

- Forecast **regional demand** - Evaluate **economies of scale** - Assess **exchange rate** and **political risk**

Question 38

Key tasks in Phase III (Select desirable sites)

Answer 38

- Evaluate **infrastructure** (hard + soft) - Check **labor** availability - Choose **potential** sites

Question 39

Key tasks in Phase IV (Location choices)

Answer 39

- **Finalize** location & capacity - **Optimize** profit vs. cost, taxes, tariffs

Question 40

Name major factors influencing network design decisions

Answer 40

- **Customer response time** - **Technology** - **Facility roles** - **Infrastructure** - **Macroeconomic** & **political** - **Risk** (geo, dependence, sustainability) - **Costs** (logistics, facility)