Regarding merchandise flow, which statement is true about the first decision?

• A. Choose a transportation company
• B. Where merchandise should go, to a distribution center or directly to stores
• C. Select an advertising strategy
• D. Determine supplier lead times

Answer: (B)

In merchandise flow, the first step is deciding where the merchandise should go in the network. This means choosing whether goods are routed to a centralized distribution center for consolidation or sent directly to stores. This decision defines the entire logistics structure, shaping how inventory is stored, how often replenishment occurs, and which transportation options make sense. Once you know the flow path, you can then pick carriers, plan routes, and estimate lead times, all aligned with that network design. The other choices—selecting a transportation company, planning advertising, or determining supplier lead times—come after establishing the distribution path because they depend on the chosen network and how the merchandise will move through it.