WAREHOUSING

Definition

Holding or preserving goods- in huge/large quantities- from the time of their purchase or production- till their actual use or sale.

The need for warehousinga. Seasonal Production - - Agricultural goods grow seasonally but are used the whole year. - These kind of goods have to be stored till they are used. - They can be supplied when needed.

b. Seasonal Demand -

- Goods like woollen are used seasonally but made the whole year

- These kind of goods have to be stored till they are used.

- They can be supplied when needed.

c. Large Scale Production -

- Goods are made in large scale to meet immediate demands

and future demands.

- Large scale production also lowers cost of production.

- These large quantities of goods have to be stored till they are sold.

- d. Quick Supply - - Goods are made in one place

but used all over. - Goods are stored in warehouses

near the place of consumption.

e. Continuous Production - - Continuous production needs continuous supply of raw materials. - Raw materials have to be stored.

f. Price Stabilization - - Less supply of goods

means price becomes more. - More supply of goods

means price becomes less. - Warehouses balance supply of goods, So prices also remain stable.

The need for warehousing arises due toi. Seasonal production of goodsii. Seasonal Demandiii. Large-scale Productioniv. Quick Supplyv. Continuous Production.vi. Price Stabilization

Characteristics of an ideal warehouse.

i) Should be close to highways, railway stations, airports, sea- ports.

ii) Mechanical equipment should be used when handling goods so that goods are

not spoilt or wasted while loading and unloading.

iii) Warehouses for perishable goods should have cold storage facilities.

iv) Goods should be protected from sun, rain, wind, moisture, dust, pest etc.

vi) There should be lots of parking space to load and unload goods.

v) There should be lots of space to store goods well.

viii) There should be fire fighting equipment to protect goods from fire.

vii) There should be security to protect goods from theft.

Characteristics of an ideal warehousei. Convenient locationii. Use of mechanical devices for handling goodsiii. Adequate space for storage of goodsiv. Cold storage facility for perishable itemsv. Protection of goods from sunlight, rain, wind, dust, moisture and pestsvi. Sufficient parking space for vehiclesvii. Round the clock securityviii. Availability of fire fighting equipment's.

Types of warehouses

b. Public Warehouses - - Maybe owned by a person, partnership firm or company. - Controlled by the government. - Used to store goods of the public. - Rent has to be paid. - Need license from government to start these warehouses.

a. Private Warehouses - - Owned and managed by producers or traders. - They use it to store their own stock of goods.

d. Bonded Warehouses - - Owned, managed and controlled by government and private agencies. - Private bonded warehouses need license from government. - Used to store imported goods for which duty is not yet paid. - Owned by dock authorities. - Found near ports.

c. Government Warehouses - - Owned, managed and controlled by central or state government or public corporations or local authorities. - Both government and private enterprises may use these warehouses.

e. Co-operative Warehouses - Owned, managed and controlled by co-operative societies. - These are used by the members of the society. - They are the cheapest.

Types of Warehouses

Owned by Managed byControlled

by Used By

1. Private Warehouse Producers or traders Producers or traders

Used to store own stock of goods

2. Public Warehouse

Person, firm or company

Governement

Store goods for public

Rent has to be paid. Need license from government to start warehouse.

3. Government warehouse

Central, state government or public corporations or local authorities

Government and private may use these warehouses

4. Bonded Warehouse Government and private agencies

to store imported goods for which duty is not yet paid

Generally owned by Dock authorities. Found near ports

Private agencies need license to start

5. Co-operative Warehouses Co-operative Socities Members of the

society They are the cheapest.

Types of warehouses i. Private warehouses,ii. Public warehouses,iii. Government warehouses,iv. Bonded warehousesv. Co-operative warehouses

Functions of warehouses

a. Storage of goods – Goods are stored in large quantities from

the time of production to the time of use.

b. Protection of goods – Protects goods from loss due to heat, dust, wind etc.

c. Risk bearing – Warehouse keeper is responsible for any loss or damage to goods stored in the warehouse.

d. Financing – Receipt is given when goods are stored.- This is proof of storage

- Warehouse keeper also issue’s a document called the warrant.

- This(warrant) is a document of title to the goods.

-The business man can get a loan by keeping this warrant as security.

- Warehouses also give advances for short term keeping the goods as security.

e. Processing – Goods are processed in warehouses to make them better.E.g. – fruits are ripened.

f. Grading and Branding – Done to help the producers.Mixing, blending and packaging is also done.

g. Transportation – Goods are transported from place of production to place of use.

Functions of warehousesi. Storage of goodsii. Protection of goodsiii. Risk bearingiv. Financingv. Processingvi. Grading and brandingvii. Transportation

Advantages of warehouses to the businessmen

i) Protection :Helps protect goods and prevent wastage.

ii) Storing seasonal goods: Agricultural goods grow seasonally but are used the whole year.

- they can be stored for regular supply.

iii) Continuous Production :To ensure continuous production, raw materials can be stored.

iv) Transport cost is less as they are near highways, railway stations, airports and sea-ports.

v) Mechanical equipment used reduces wastage while handling goods.

vi) Helps small businessmen who cannot afford their own warehouses.

vii) Gives employment and raises standard of living.

viii) Helps sale of goods by doing grading, branding, packaging etc.

ix) Ownership of goods can be easily transferred - by transferring warehouse keeper’s warrant.

x) Warehouse warrant can be used to get loans. - Warehouses also give advances for short term for goods

stored.

xi) Warehouses take steps to prevent theft, fire & spoiling of perishable goods.

- Goods stored can be insured against loss.

Advantages of warehousingi. Protection and preservation of goodsii. Regular flow of goodsiii. Continuity in productioniv. Convenient locationv. Easy handlingvi. Useful for small businessmenvii. Creation of employmentviii. Facilitates sale of goodsix. Availability of financex. Reduces risk of loss

Fill in the blanks with suitable words given in brackets:

(i) Food Corporation of India maintains ___________ warehouses.(Government, private, bonded)

(ii) Warehouses used exclusively by the traders to store there own goodsare known as ___________ warehouses. (Bonded, public, private)

(iii) License from the government is not required to start a ____________warehouse. (Bonded, private, public).

(iv) Bonded warehouses are generally found near ____________________.(industrial area, ports, commercial centers)

(v) Goods for which import duty is not paid are kept in ___________warehouses. (Private, public, bonded)

II. Multiple Choice Questionsi. Which of the following is not a need for warehousing?(a) Quick supply of Goods (b)Seasonal production goods(c) Large-scale production (d) Small scale production

ii. Which of the following type of warehouses are situated at Airports and Seaports?(b) Public warehouses (b) Government warehouses(c) Bonded warehouses (d) Co-operative warehouses

iii. The warehouses owned and managed by the Manufacturers or Traders to Store exclusively their own stock of goods are known as.(a) Government warehouses (b) Private warehouses(c) Public warehouses (d) Cooperative warehouses

iv. Which of the following is not a function of warehouses?(a) Risk bearing (b) Financing(c) Transport facility to every customer (d) Protection of good.

v. Which of the following is not an advantage of warehouses?(a) Useful for small businessman (b) Available at convenient location(c) Do not create employment (d) Make easier the Availability of Finance.

• Need for warehouse :– i. Seasonal production of goods– ii. Seasonal Demand– iii. Large-scale Production– iv. Quick Supply– v. Continuous Production.– vi. Price Stabilization

Advantages of Warehouse :-i. Protection and preservation of goodsii. Regular flow of goodsiii. Continuity in productioniv. Convenient locationv. Easy handlingvi. Useful for small businessmenvii. Creation of employmentviii. Facilitates sale of goodsix. Availability of financex. Reduces risk of loss

Types of warehouses i. Private warehouses,ii. Public warehouses,iii. Government warehouses,iv. Bonded warehousesv. Co-operative warehouses

Characteristics of an ideal warehousei. Convenient locationii. Use of mechanical devices for handling goodsiii. Adequate space for storage of goodsiv. Cold storage facility for perishable itemsv. Protection of goods from sunlight, rain, wind, dust, moisture and pestsvi. Sufficient parking space for vehiclesvii. Round the clock securityviii. Availability of fire fighting equipment's.

Functions of warehousesi. Storage of goodsii. Protection of goodsiii. Risk bearingiv. Financingv. Processingvi. Grading and brandingvii. Transportation

Thank you