As mentioned earlier, the three important aspects fo physical distributional re warehousing, transportation and inventory management. The basic decisions to be made concerning warehousing are how many warehouses of what size company needs and in which country they should be located. The decisions on warehousing require information such as where the firm’s customers, both current and potential are geographically located around the world; what is the pattern of their current demand and what demand pattern is likely to emerge in the future; and what level of customer service should be followed. All these information are analyzed before making the warehousing decision. The transportation decision mainly involves choice of a model of transpiration for shipping the goods, both internationally and locally within a foreign nation. This decision is affected by such pre-factors as the availability of transportation, nature of product, size of shipment, distance to be traveled, and type of demand and costs fo different shipping alternatives.

Investor management deals with stocking investor to fill customer orders. It involve two decisions- how often to order in a given period and how much to order.

For an integrated decision on international physical distribution, these three aspects should be considered simultaneously. This amounts to considering physical distribution as a system. The cost involved in administering warehousing, transportation and inventory functions are inter-related, and they must be considered simultaneously of reflective decision-making.

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