Distribution Network Models

February 28, 2018

Distribution Network refers to the distribution system followed by economy to supply goods and services to the customer or its general masses.

Historically, there exist three types of models:

  • State: The state government takes the responsibility of supplying the goods and services required by population with no payment done by customer. For example, former Soviet Union and communist china.
  • Market: The price of goods and services is determined in open market on the basis of their demand and supply. For example, Euro-America till 1930.
  • State-Market mix: In this distribution system, certain goods and services might be provided to customer free of cost or at subsidised price by state while some might be provided by market for which customer has to pay. For example, India.

Most of the economies of the world follow one or other type of distribution system. As the socio-economics composition of the population of economy changes, the mixture of goods and services supplied by state and market get redefined in the economies from time to time.

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