Consider the following statements about order processing in physical distribution:
(A) In a typical buyer-seller relationship, order placement is the first step.
(B) Orders flow in the same direction as products, that is, from manufacturers to customers.
(C) Slow or inaccurate processing of orders can make goods reach customers late or in wrong quantity.
(D) Accurate and speedy processing of orders is needed mainly to reduce the cost of storing goods in warehouses.
Which of the above statements are correct?
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → (A) and (C) only
(A) In a typical buyer-seller relationship, order placement is the first step. — Correct. The buyer first places an order, and the rest of the process follows from it.
(B) Orders flow in the same direction as products, that is, from manufacturers to customers. — Incorrect. Products move from manufacturers to customers, but orders flow the other way, from customers to manufacturers.
(C) Slow or inaccurate processing of orders can make goods reach customers late or in wrong quantity. — Correct. Without accurate and speedy processing, goods reach customers late or in the wrong quantity. This leads to customer dissatisfaction and loss of business and goodwill.
(D) Accurate and speedy processing of orders is needed mainly to reduce the cost of storing goods in warehouses. — Incorrect. Speedy processing is needed so that goods reach customers on time and as ordered. The cost of warehousing is balanced against customer service through the number of warehouses.
NCERT (2026-27 Edition): “1. Order Processing: In a typical buyer-seller relationship, order placement is the first step. Products flow from manufacturers to customers via channel members while orders flow in the reverse direction, from customers to the manufacturers. A good physical distribution system should provide for an accurate and speedy processing of orders, in the absence of which, goods would reach the customers late or in wrong quantity or specifications. This would result in customer dissatisfaction, with the danger of loss of business and goodwill.” |