The "total cost approach" to physical distribution management:
A) seeks to eliminate the storing function.
B) seeks to minimize the cost of transportation.
C) might suggest a high-cost transporting mode if storing costs could be reduced enough to lower total distribution costs.
D) ignores inventory carrying costs.
E) All of the above.

Question

Quizplus · Accepted Answer

The total cost approach to physical distribution management considers all costs associated with transportation and inventory storage. This approach seeks to minimize total distribution costs, which may mean choosing a higher-cost transportation mode if it results in lower storing costs. Therefore option C is the correct answer. The other options are incorrect as the total cost approach does not seek to eliminate the storing function and also considers inventory carrying costs.

The "Total Cost Approach" to Physical Distribution Management