Distribution Strategies - Direct shipment distribution strategies

3 important questions on Distribution Strategies - Direct shipment distribution strategies

Why do direct shipment distribution strategies exist?

They exist to bypass warehouses and distribution centers.

What are the advantages of direct shipment distribution strategies?

  • The retailer avoids the expenses of operating a distribution center
  • Lead times are reduced

What are the disadvantages of direct shipment distribution strategies?

  • Risk-pooling effects are negated because there is no central warehouse
  • The manufacturer and distributor transportation costs increase because it must send smaller trucks to more locations

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