Question 5: Explain in detail the warehousing services.
Answer:
Warehousing provides different services:
1. It eases the production in anticipation of demand: In the modern world, production of goods is undertaken in anticipation of demand rather than going against to the existing demand. Hence, warehousing gives services to store these goods properly till the demand for them is made.
2. Warehousing sustains the stock of seasonal production: Production of certain commodities takes place only during the specific season of the year whereas the demand for the same exists and has to be net throughout the year. Hence, warehousing helps in sustaining the equal supply of these goods throughout the whole year.
3. Warehousing provides basis both to the wholesalers and the retailers: Storage makes the basis of operation by the wholesalers and retailers. Retailers store the goods to be made available to the customers on their demand and wholesalers do so to maintain an uninterrupted supply-line to the retailers. Warehousing gives good opportunity to wholesalers and retailers to help in the economies of bulk buying as they often buy goods far in excess of their immediate demand which needs to be store.
4. Warehousing enables the producers to respond according to the production techniques: Sometimes the production processes may also required storage of partly manufactured goods for various periods to a time.
5. Price stability: Sometimes storage of goods may become very important in order to correct any distortions in the prices e.g. in case of seasonal goods, their plentiful supply in the season may create conditions of surplus or excess thus forcing the prices to fall or minimize. Warehousing enables producer to maintain stock of excess quantity during this period of time and thus, helps in establishing the prices.
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