Most organizations believe in the norm that all business operations should be aimed at serving customers at a profit and for that suitable relationship need to exist between sales volume and costs of various kinds including physical distribution costs.
There are certain distribution related activities like packing, freight rate quotations and promptness of delivery that are important in securing sales volume. The costs of such activities are to be kept under control or else sales volume yields less profit.
The benefits of suitable relationship with physical distribution are significant. Proper relation between sales and physical distribution will reduce stock out occurrences and also reduce customer’s inventory requirements along with cementing relations with customers and allow greater concentration on demand creation.