Case Study 2

573 WordsJul 27, 20143 Pages
Combined Warehousing Introduction What is Warehousing? According to (Bowersox, Closs, Cooper, 224 ) warehousing was previously viewed as a place to store inventory. Recently warehousing has become more than just a place to store inventory. Warehousing in now the concept of ensuring the correct merchandise is stored in order to meet customer requirements. Warehousing allows companies to strategically place inventory at various locations to achieve the lowest total cost for transportation and manufacturing, while guaranteeing the products are delivered to the customer as required. The new concept of warehousing reduced the amount of bulk inventory a warehouse stored and allowed the Just-In-Time method to be utilized. This method reduces the amount of on-hand stock carried in inventory, resulting in less surplus of unused merchandise and minimized the expenses associated with carrying a large inventory. A firm must first decide if it is beneficial to add warehousing to its logistical system. In order for a firm to make this decision warehousing should offer both service and economical benefits. These benefits should cost less or add more value to the company than the additional warehousing expense. After the company has determined if it will add warehousing as a logistical service it must then determine if it will utilize private or public warehousing. Private or Public Warehousing? According to (Bowersox, Closs, Cooper ,235) a private warehouse is a facility that is operated by the firm that owns the product being stored. There are many advantages to utilizing private storage. These advantages include the operating cost, which is normally cheaper than public storage. These opportunity for the firm to have the storage custom built according to the owners’ required specifications for the services they will perform. Furthermore, it also

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