Posted in Operations and Supply Chain Terms, Total Reads: 115
Definition: Numeric Distribution
Numeric distribution refers to number of stock keeping units or stores which contains a particular brand of product. Numeric distribution helps to calculate reach of brand in terms of percentage in relevant market. Numeric distribution does not have relation with sales volume of the brand of product. Thus numeric distribution determines in how many locations a particular brand is available to customers.
Numeric distribution = (Number of shops carrying a particular brand) ÷ (Total number of shops)
If we consider an example of Colgate toothpaste selling in a store and its sales volume in particular store.
So if we want to calculate numeric distribution of product from stores 1 to 3 then we calculate it as:
Numeric distribution = ¾ =75%
Thus it shows that Colgate toothpaste is available in 3 stores out of 4 giving numerical distribution as 75% .If we take any decision based on this figure it could be misleading as we can see Stores 1 to 3 contribute to only 30% of sales volume while store4 gives 70% sales volume. This anomaly can be eliminated in weighted distribution which considers quality of distribution thus giving weighted distribution as 30% for stores 1 to 3. So both numeric and weighted distribution should be looked at while making any decision based on distribution of product.