sts are minimized at each level of distribution. Through integration, coordination and synchronization of marketing product flows from the point of production to the point of use seamlessly and with a single entity (the administrator) overseeing that the system functions effectively and efficiently.
Manufacturers participate in distribution systems because it can help them control their costs by evening out demand. By using a distribution system (which often uses automatic ordering and purchasing systems among the various participants), manufacturers are in a better position to implement just in time (JIT) inventory control and production so that they minimize their inventory carrying costs and realize greater profit.
A company manufacturing frozen pastry products, for example, might use a distribution system so that it creates all of the products for a particular region at one time, reducing the amount of time that the inventory would spend in storage at the manufacturer. Instead, the goods can be loaded into refrigerated trucks (or other mode of transportation) in larger quantities since all of the goods for a specific region would be shipped at one time. This increases the efficiency of the transportation, and helps ensure that the retailers receive the goods they need when they need them.
2. Economists have long maintained that supply and demand should dictate pricing decisions since the quantity supplied at a particular price and the quantity demanded at a particular price will be driven toward equilibrium (where the quantities are the same) due to market forces (or the "invisible hand") (Samuelson & Nordhaus, 1989). Both of these factors (supply and demand) are influenced by elasticity, which indicates how steep the slope of the supply and demand curves are. When the demand curve has a steep slope, a large change in price results in only a small change in quantity demanded. This is the case in California, where eve...