Chapter 11, Problem 17AA

To determine

To state: The party performing the storage function of distribution.

Answer to Problem 17AA

The storage function of distribution is done by producers, wholesalers as well as retailers.

Explanation of Solution

The producer after making the final product may sell it directly to the end consumer or may make it available to the customer using marketing intermediaries like wholesalers, retailers and agents. They need to store the raw materials required in the production as well as the final product in the warehouse before transferring it to the consumer or wholesaler or retailer depending on the type of distribution channel.

Warehousing is an important function performed by wholesalers. They need to ensure sufficient stock of goods is always available at the disposal of the retailer and avoid periodic shortages. A lot of wholesalers even maintain their own warehouses.

Retailers need to maintain stock of goods at all times in order to promptly meet consumer demand and thus, they need to have sufficient storage facility.

Economics Concept Introduction

Introduction:

Distribution- It is the process through which goods and services are made available for consumption to the end user.

Storage- It refers to the process of keeping raw materials as well as intermediate and final goods safely before they are made available for further consumption.