• Producers locate operations in the best locations, regardless of the locations of their customers.
• By concentrating operations in large facilities, producers can get economies of scale.
• Producers do not keep large stocks of finished goods, as these are held further down the supply chain nearer to customers.
• Wholesalers place large orders, and producers pass on lower unit costs in price discounts.
• Wholesalers keep stocks from many suppliers, giving retailers a choice of goods.
• Wholesalers are near to retailers and have short lead times.
• Retailers carry less stock as wholesalers provide reliable deliveries.
• Retailers can have small operations, giving a responsive service near to customers.
• Transport is simpler, with fewer, larger deliveries reducing costs.
• Organisations can develop expertise in specific types of operation.