Winston-Salem/Forsyth County Schools



3.02 Understand operation’s role and function in business to value its contributions to a companyActivity 2: Channels of Distribution Directions: Read the following information.There are two types of goods; consumer and industrial goods. The way that goods get from the producer to the consumer is called a channel of distribution. The most common channel of distribution for consumer goods includes a producer, a wholesaler, and a retailer shown in the example below.5067300635Annie’s Apple OrchardAllen’s Apple Distributors, Inc.ConsumerFood Lion0Annie’s Apple OrchardAllen’s Apple Distributors, Inc.ConsumerFood Lion2695575635Apple FarmerApple BuyerConsumerGrocery Store0Apple FarmerApple BuyerConsumerGrocery Store40005010160ProducerWholesalerConsumerRetailer0ProducerWholesalerConsumerRetailer1899285109855Same as00Same as4255770106680Same as00Same asA channel of distribution is often referred to as a supply chain. The four segments of this supply chain are the producer, wholesaler, retailer, and consumer. Each segment is the supplier of the following segment. Each segment is the customer of the preceding segment. Producers supply Wholesalers who supply retailers who supply consumers. Wholesalers are the customers of the producers, retailers are the customers of Wholesalers and consumers are the customers of retailers.Another type of intermediary is the agent or broker. An agent is an intermediary who brings buyers and sellers together. Broker is another term for agent. The purpose of an agent is to connect sellers and buyers. An agent does not take possession of the product – they act as a go between. A channel of distribution with no intermediaries is called direct distribution –the consumer purchases the product directly from the producer. Ex. Someone goes to a farm and purchases a dozen eggs from the farmer. When intermediaries get involved we call that indirect distribution. Most distribution channels are indirect: Producer – Retailer – Consumer for example.Channel of Distribution Activity: Complete the channels of distribution by filling in the blanks with the “Members Used” information below. To help you, the boxes have been color-coded. Color Codes:Members Used:187642598425A father purchases an ipod from Best Buy for his sonJCPenny’s buys clothing from Tommy Hilfiger A local sandwich shop purchases Heinz from Wal-Mart to use on their friesNike contacts Sports Unlimited to place their cleats in storesA mother buys cleats from Dicks Sporting Goods for her sonNike produces football cleatsA teenager buys a new pair of Tommy Hilfiger jeans from JCPenny’sSiding Plus makes a deal with John’s Exteriors to purchase 500 boxes of Wolverine sidingA+ Condiments is contacted by Heinz to sell their ketchupSports Unlimited places Nike’s cleats in Dicks Sporting GoodsAmerican Airlines purchases an airplane from BoeingTirerack purchases 500,000 tires from GoodyearApple produces ipodsTommy Hilfiger, a fashion designer, creates clothingBest Buy purchases 15,000 ipods from HGBulkToyota purchases 50,000 tires from TirerackBoeing manufactures aircraftsWal-Mart purchases 5,000 cases of Heinz ketchup through A+CondimentsGoodyear produces tiresWolverine contacts Siding Plus to sell their siding to contractorsHeinz produces ketchupWolverine produces vinyl sidingHGBulk buys 200,000 ipods from Apple00A father purchases an ipod from Best Buy for his sonJCPenny’s buys clothing from Tommy Hilfiger A local sandwich shop purchases Heinz from Wal-Mart to use on their friesNike contacts Sports Unlimited to place their cleats in storesA mother buys cleats from Dicks Sporting Goods for her sonNike produces football cleatsA teenager buys a new pair of Tommy Hilfiger jeans from JCPenny’sSiding Plus makes a deal with John’s Exteriors to purchase 500 boxes of Wolverine sidingA+ Condiments is contacted by Heinz to sell their ketchupSports Unlimited places Nike’s cleats in Dicks Sporting GoodsAmerican Airlines purchases an airplane from BoeingTirerack purchases 500,000 tires from GoodyearApple produces ipodsTommy Hilfiger, a fashion designer, creates clothingBest Buy purchases 15,000 ipods from HGBulkToyota purchases 50,000 tires from TirerackBoeing manufactures aircraftsWal-Mart purchases 5,000 cases of Heinz ketchup through A+CondimentsGoodyear produces tiresWolverine contacts Siding Plus to sell their siding to contractorsHeinz produces ketchupWolverine produces vinyl sidingHGBulk buys 200,000 ipods from AppleGreen for ProducerAqua for Retailer Yellow for Wholesaler Purple for Consumer Orange for AgentGray for Industrial User Pink for Industrial Distribution2804160647065A family buys a pumpkin straight from the farmerA family buys a pumpkin straight from the farmer11430650875A farmer produces pumpkinsA farmer produces pumpkinsChannels of Distribution Directions: Use the directions posted online to fill in the following. Pay attention to color codes and use each member listed only once.Channels of Distribution for Consumer GoodsDirect distribution for pumpkins I have done this one for you as an example.16389351149356688455392430003221355405130001143040513000Indirect distribution for clothing57016651289052411730130175073456803498850473583039751002284730391160039370394970Indirect distribution for music players675259011112542049709525018211809715507174230365125047358304032250020593054032250400054127500Indirect distribution for sport shoes6745605838200164020510287004270375863603821430595630004000563373000Channels of Distribution for Industrial goodsDirect Distribution for aircraft2776855939806888480360680003354705379730007810542735500Indirect Distribution for tires61290208572502545080107950006497955365760003221355384810007810538481000Indirect Distribution for Vinyl siding58788305651502516505977900068789556527800017354556051550440245562420500717423035242504707255428625021189954102100781054095750Indirect Distribution for ketchup ................
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