LOGISTICS IN RETAIL

Retail Buying.
Logistics
 Logistics is the management of the flow of
the goods, information and other resources in a repair
cycle between the point of origin and the point of
consumption in order to meet the requirements of customers.
 Logistics involves the integration of
information, transportation, inventory, warehousing, material
handling, and packaging, and occasionally security.
 Logistics is a channel of the supply chain which adds the
value of time and place utility.
 Today the complexity of production logistics can be modeled,
analyzed, visualized and optimized by plant simulation
software.
Retail Distribution
 It is defined as a chain of intermediaries, each
passing the product down the chain to the next
organization, before it finally reaches the consumer
or end-user.
 This process is known as the 'distribution chain' or
the 'channel.'
 Each of the elements in these chains will have their
own specific needs, which the producer must take
into account, along with those of the all-important
end-user.
Allocation
 Allocation is the process of assigning individual item quantities to
specific stores based on analytical approaches that recognize the
performance of those items and their history or potential at different
stores.
 Using multiple sets of rules and logic allows allocation to handle a
wide variety of product types when planning the buy or executing
the distribution. 
 The objectives of allocation solutions are to minimize time required
to allocate product and maximize profit by reducing costs and
aligning product placement with store opportunity to sell.
 Initially establishing allocation models can be a time-consuming
process.
 However, once established these models can be reused for the
allocations of successive purchase orders for product with similar or
identical characteristics. 
Replacement Models
 Rejection is the term commonly used to signify an
item that is not that is not appreciated by the
customer because it does not meet the expectations
of the customers.
 Sources of rejection
1- An item may be rejected by the retailer/
purchase returns.
2- The item can be rejected by a customer of the
retailer.
 Reasons-
 Poor quality of the item.
 The item may not be same as required.
 The item may be of wrong size.
 The quantity supplied may be incorrect.

 Rejection must be handled on a daily basis and should

in fact even be valued at full price as in most cases.
 The rejected items are either replaced with new item or
are given credits for the same amount.
Distribution Centre
 A distribution centre is a warehouse that is
responsible for receiving all the merchandise from
the multiple vendors, and there after for sorting
and then sending the same to respective stores.
 The distribution centres are usually very well
networked not only with other departments but also
with their respective stores.
 It is an extremely complex operation which is
simplified by the use of cutting edge technology.
Push/pull logistics
 Globally there are only two major strategies adopted
for allocating the merchandise in the store-
 Push distribution strategy- The merchandise is
allocated according to the stores based on historical
demand, the inventory position at the distribution
centre as well as the stores need.
 Pull distribution strategy- orders of the merchandise
are generated at the store level on the basis of the
demand data captured by the point of sale terminals.