Question

Freight transport facilitates place utility for raw materials and manufactured goods. Analyse the given statement and provide example with explanation. (20marks)

Answer 1

Freight transport facilitates place utility for raw materials and manufactured goods. The statement above is true as storing the raw materials and manufactured goods in mode of transports like trucks is a form of storage. For example, an exporter, Raju owns a business of motorcycle spare parts. He owns 2 trucks for transporting his finished product to buyers. Assuming he has a godown which has no room left for storing excess stock. He can store the excess stock in his 2 trucks. After selling his stock of spare parts, he will have two empty trucks which he can use as storage in future if he suffers shortage of storage. Similiarly, lets take a domestic household example. A family living in a one bedroom flat buys a new LED smart TV. They no space left in house to keep their old television until it is sold to someone. For time being they can use their car to keep the old tv in it until they are able to find a customer ready to purchase their old television. This way a vehicle can be used as a place for storage. Many business men, mainly wholesalers, who buy goods in bulk and sell to retailers adpot this way as a mode of transport. They set an agreement with transporters to store their products and raw material until they recieve an order from buyers and sell their product.