Distribution Channels Create Efficiencies by Reducing the Number of Transactions

question 96

Essay

Distribution channels create efficiencies by reducing the number of transactions necessary for goods to flow from many different manufacturers to large numbers of customers.Discuss two ways that they create efficiencies and provide an example of each.

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Definitions:

Regulation

The establishment and enforcement of rules or laws by government or regulatory bodies to govern behavior in specific industries or areas.

Idle Production Capacity

The portion of a manufacturing facility that is not being used but could be producing goods or services.

Inventory Costs

Costs associated with storing, managing, and maintaining a company's stock, including warehousing, security, insurance, depreciation, and potential obsolescence.