Question

Problem 2. (Chapter 11: The Storage and Handling System)

Under what general circumstances is private warehousing a better choice than public warehousing?

Answer 1

In public warehousing, there is always a communication issues due to technology or contractual obligations; specialized services may not be available based on the particular location as many times public warehousing facilitates localized services; In peak business seasons sometimes, the shortage of space creates problem in public warehousing. Hence, all these factors become general conditions for private warehousing. Thus, private warehousing provides direct control of the operations and visibility on the product move by having total logistics processes in place; flexible operations based on the need or demand from the customer and features of the product; If we see the operating cost of the private warehousing as compared to the public warehousing, it will be lesser in long term preview; private warehousing offers greater usage or utilization of the available employees; reduction in tax payable due to privately held machinery or space; Finally, great customer satisfaction comes from the stable business continuity and its operations.