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Describe the principle of differentiated distribution. Please explain how/why it is illustrated in the following situations.

a. There are two types of orders - regular orders and occasional back orders. There are two types of warehouse inventories - field warehouse inventories and plant warehouse inventories. Premium transportation (other than regular transportation) could be used if necessary. How each type of orders could be satisfied from which type of inventories, using which type of transportation, based on the principle of differentiated distribution (in order to minimize the Total distribution costs)?

b. All products are grouped according to an ABC classification scheme, where A items have high sales volume, B items have moderated sales volume, and C items have low sales volume. There are three types of warehouses - field warehouse, regional warehouse and plant locations. How should each type of items be stocked in which type of warehouse, in order to minimize the Total distribution costs?

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