1-18.11 Distribution Plan

When making distribution decisions for a single item, there must be a systematic approach to determining the most cost-effective and efficient means of distribution. Three common options of warehousing and distribution are:

The storage and distribution costs associated with each of these options may differ from each other and may vary depending on the specific item. In addition, some items could potentially use a combination of these options. As a result, when purchasing an item, it is critical to evaluate the different viable storage and distribution alternatives and select the one that is most cost-effective and efficient. Cost-modeling tools are effective in this evaluation and selection. The Postal Service uses the Order Fulfillment Cost Analysis Tool (OFCAT) for making storage and distribution decisions in cooperation with Postal Service and 3PL transportation providers. The OFCAT is a cost estimation tool that can be used to evaluate postpurchase warehousing and distribution costs. Transportation allocations are addressed by the Transportation Solution Determination Process.