Warehousing in Logistics System Essay

1246 Words Jun 13th, 2016 5 Pages
Warehousing in logistics system

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Institution

The role of warehousing in logistics system

A warehouse is the building for storing goods while warehousing refers to the place or building where goods are stored. Warehousing plays the role of consolidation in the logistics system. Consolidation is the process of reducing the costs of transportation by consolidating the movement (Ross, 2004). Most of the companies supply their client with the same goods through a warehouse. From the warehouse; commodities are sent in a bulk shipment to the consumer. Therefore, rather than transporting the products in small shipment, it is economical having a consolidation
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This function enables the company to postpone the commitment of commodities to the consumer until they receive orders from them.

Types of warehouses

There are different types of stores including private, public, and bonded. Private stores refer to the warehouses, which are operated and owned by prominent merchants, and manufacturers to assist them to fulfill their storage requirements or needs. The commodities purchased or produced by the warehouse owner have limited value of utility. The various channel of vendors or resellers own this type of storage, and they only use it to distribute their activities (Altekar, 2005). The big businesses with a lot of money construct their warehouses to store their products. Therefore, a big manufacturer may have different networks of warehouses in the various parts of the country.

A public warehouse on the other hand refers to specialized business created to offer storage facilities to the public, and some amount of fee is charged. This type of store may be operated by a cooperate society or an individual. Furthermore, it works under the license from the government according to the prescribed regulations and rules (Altekar, 2005). These types of warehouses are significant in marketing the agricultural products and therefore, the government highly encourages the establishment of these kinds of warehouses. A public warehouse helps the business society a lot because most of

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