Some Problems Associated with the Distribution of Consumer Products

Abstract

The distribution problem is considered as a whole. The interconnexions are shown between various subproblems: factory siting, warehouse (or depot) siting, subdepot siting, allocation of production resources to factory sites and minimization of costs. It is suggested that the results obtained for certain products distributed nationally through grocery outlets are valid (with qualifications) for any nationally marketed consumer product. The use of traditional operational research techniques, where appropriate, is referred to but not in great detail. A logical approach to siting problems, particularly the siting of a large number of subdepots, is outlined. The aim of this approach is to obtain the correct answers with the minimum amount of work. The implications for marketing are discussed with particular reference to costs: the cost of distributing goods to certain areas may be unduly high; the cost of customer service may rise disproportionately as the level of service given rises. A balance must be struck which is in line with the company's aims but which may mean modifying production, distribution and sales objectives.