Identify the component of physical distribution from the following:
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Inventory control
Option (1) Order taking — Incorrect. The component is order processing, which covers the handling of an order after it is received. Taking an order is part of selling.
Option (2) Inventory control — Correct. Physical distribution covers all the activities that move goods from the maker to the customer. Its main components are order processing, transportation, warehousing and inventory control. Inventory control decides how much stock to keep, so that goods are ready when customers want them without too much money being locked up.
Option (3) Objectives — Incorrect. Objectives are the aims of a business. They are not an activity of moving goods.
Option (4) Government regulations — Incorrect. These are a factor that affects the fixing of price, not a component of physical distribution.
NCERT (2026-27 Edition): “Physical Distribution … Physical distribution covers all the activities required to physically move goods from manufacturers to the customers. Important activities involved in the physical distribution include transportation, warehousing, material handling, and inventory control. These activities constitute major components of physical distribution.” “Components of Physical Distribution The main components of physical distribution are explained as follows: “4. Inventory Control: Linked to warehousing decisions are the inventory decisions which hold key to success for many manufacturers, especially those where the per unit cost is high. A very important decision in respect of inventory is deciding about the level of inventory. …” |