Differentiated distribution See Bo

Differentiated distribution
 See Box 2.5 application.
 A small specialty chemical company.
 All products were produced at a single location.
 All large customer orders (top 10% of the company’s volume), will to be shipped direct to customers from the plant.
 Other small shipment sizes, were to be shipped out of two strategically located warehouse.
 Saved 20% distribution costs.
 Others:
Regular customer orders : regular distribution channel might be to fill orders from warehouses.
Back orders : out-of-stock, a backup distribution might be to fill orders from secondary stocking points.