The incorrect option is "If the average lot size is large, it is better to have a longer channel." Distribution Channel:A distribution channel is a network of businesses or intermediaries through which a good or service is purchased by the final buyer.Wholesalers, retailers, distributors, and the Internet are all examples of distribution channels.When the manufacturer sells directly to the consumer it is called a direct distribution channel.Important Points Factors determining distribution channel:Size of the market: The larger the market size, the longer the channel. Conversely, the smaller the market the smaller the channel. Hence, option 1 is correct.Order lot size: If the order lot size is small, it is better to have a longer channel and vice-versa. Hence, option 2 is incorrectService Requirements: If the product and market require a high level of service, and it is a major factor in buying decisions, it is better to keep a shorter channel. Hence, option 3 is correct.Product variety: If a wide assortment of same type of product is available in the market, then it is advisable to select a wider channel. Hence, option 4 is correct.