Explain warehousing and its functions.

Q.5:- Explain warehousing and its functions.



Warehousing was initially viewed as a provision of static unit for keeping and storing goods in a scientific and systematic manner so as to maintain their original quality, value and usefulness but now it is viewed as a logistical service provider of the right quantity, at the right place, in the right time, in the right physical form at the right cost. Functions of Warehousing

(i)   Consolidation The   warehouse   receives   and   consolidates materials/goods from different production plants and dispatches the same to a particular customer on a single transportation shipment.  

(ii)  Break the Bulk The warehouse divides the bulk quantity of goods received from the production plants into smaller quantities and then transported according to the requirements of clients to their places of business.

(iii) Stock Piling Goods or raw materials which are not required immediately for sale or manufacturing are stored in warehouses to be made available to business depending on customers demand. This type of warehouse is also known as the storehouse of surplus goods.

(iv) Value Added Services Provision of value added services such as in transit mixing, packaging and labeling is also a function of modern warehousing.

(v) Price Stabilization Warehousing performs the function of stabilizing prices by adjusting the supply of goods according to demand. Financing Warehouse owners provide loans to the owners on security of goods and further supply goods on credit terms to customers. The warehouse keepers issue a receipt when goods are kept in warehouse. This receipt can be used as security to get loans from banks and owners. In this way it also helps in financing.