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The different types of modelling the physical distribution system or sub‐sectors of it which have been developed and are available are outlined. The ways in which they can be used by companies are then explained. Models allow experimentation with changes to the distribution system thus keeping the company's system as close to the optimum as possible. No company should assume their system remains viable over time; models allow examination and assessment of the impact of possible remedial action.

The problem of what level of service to provide to customers is frequently a source of argument between marketing and distribution personnel. This article examines the factors that can affect the range of choices and, with particular reference to a practical example, describes a method of determining the costs implied by changing the service level.

The growing interest in recent years in the use of operational research methods in fleet management probably stems from the realization that the cost of distribution of goods and services constitutes in some cases a significant proportion of the sales value of items. It is not surprising, therefore, to find many studies concerned with the problems of fleet management: What size should the fleet be? What replacement policy for the purchase of new vehicles should be adopted? What maintenance policy is best? How should the fleet be used to deliver goods in response to customer demand?

The choice of what services to provide to customers is a problem of strategic significance to most companies, yet this is a decision which is often taken in an arbitrary fashion for purely qualitative and subjective reasons. The decision made here can have serious repercussions in many areas of company operations and especially in the design and operation of the distribution system. For example, a decision to deliver to all customers within twenty‐four hours of receipt of an order can lead to a distribution system involving a large number of small, expensive depots and an underutilised delivery fleet. On the other hand an unreliable service, with many partially filled orders or frequently damaged articles for example can mean a loss of sales as customers go elsewhere.

Distribution systems planning frequently involves two major decisions: facility location and vehicle routing. The facilities to be located may be “primary facilities”, e.g. factories, but more often, these are lighter “secondary facilities” such as depots, warehouses or distribution centres. Routing decisions concern the optimal movement of goods and vehicles in the system, usually from primary to secondary facilities, and from secondary facilities to users or customers. Studies which integrate the two areas are more often than not limited to the case where all deliveries are return trips involving only one destination. There exist, however, several situations where vehicles visit more than one point on the same trip. In such cases, relationships between location and routing decisions become more intricate. Strategies by which the two aspects of the problem are optimised separately and sequentially are often sub‐optimal. Also of importance is the trade‐off between the cost of providing service and customer inconvenience. A framework is proposed for the study of such combined location‐routing problems. A number of real‐life cases described in the literature are summarised and some algorithmic issues related to such problems are discussed.

Before distribution managers can effectively manage customer service, they must be able to determine how sales respond to various levels of service. The potential for customer service to contribute to a company's sales is generally acknowledged and has received considerable attention in the literature over the past several years. Much of the work, however, has been of a theoretical nature. Empirical studies have been confined largely to analyses of data collected by surveys which measure respondents' opinions regarding varying levels of logistics service. Hence, conclusions are based on sales expectations or purchase intentions of sellers and buyers, respectively. It is not suggested that respondents would misrepresent their concern for service levels, but little work has been done to confirm the proposed sales‐service relationships through analysis of historical data. If expectations and/or intentions indeed become actions, the impact should be observable in sales patterns over time.

A model for the location of depots is described; the model being a reconciliation between the ‘Feasible Set’ approach and the ‘Infinite Set’ approach, both of which have distinct advantages.

The distribution of goods has a very long history. It is distribution that enabled man to specialise in different functions or activities and, indeed, provided the means for trade. Distribution has had its share of new technology. Indeed, distribution probably took the first major step forward with one of man's earliest and most important discoveries, namely the invention of the wheel. It is still being used.

The distribution of goods has a very long history. It is distribution that enabled man to specialise in different functions or activities and, indeed, provided the means for trade. Distribution has had its share of new technology. Indeed, distribution probably took the first major step forward with one of man's earliest and most important discoveries, namely the invention of the wheel. It is still being used.

Scheduling is defined by Baker as, “the allocation of resources over time to perform a collection of tasks”. The term facilities is often used instead of resources and the tasks to be performed may involve a variety of different operations.