What is the purpose of a distribution center?

The purpose of a distribution center is primarily centered around the efficient management and storage of finished goods or service items. These centers function as critical nodes in the supply chain, specifically designed to receive products from various suppliers, store them temporarily, and then distribute them to retailers, wholesalers, or directly to customers.

Distribution centers facilitate quick order fulfillment and inventory management, enabling businesses to respond swiftly to customer demand. They help ensure that products are readily available for shipment, minimizing lead times and optimizing the overall supply chain operations. This role is distinct from a warehouse, which might hold inventory without necessarily having the operational function of processing orders and shipping, whereas a distribution center is more actively involved in getting products out to customers efficiently.

Options that mention raw material storage, product assembly, or selling products do not encompass the primary function of a distribution center. Instead, these aspects pertain to different stages or locations in the supply chain and logistics processes.