Question

Describe the difference between first possession and unitization as ways to assign property rights to a resource that is movable or has unknown boundaries. What are the benefits or limitations of these two alternatives? What conditions would make unitization preferred?

Answer 1

Definition: Unitization

It is the process of consolidation of several units into single unit. It is made of a number of items or a bulky material and is constrained to lifted and shifted because it is too bulky to be moved manually. Material handling cost decreases as the size of the unit increases.

Using a carton would be more economical than lifting items individually and combining several cartons into a unit load would be even more economical.

Example:

At the time of transferring the purchased components in the car we do not keep them individually we place them in a bag. Similarly unit loads are used in the industry .Pallet is an example of a unit load device usually has a dimension of 48”X40”X4” designed so that several packages are placed on it. Several such packages form a unit cube.

BENIFITS OF UNITIZATION:

Cost Reduction

LOWER HANDLING COSTS In general, whenever a load of packaged products increases in quantity, size & weight, the cost per unit handled becomes lower. Unitizing products therefore, significantly reduces handling costs. LABOR SAVINGS Without exception, the handling of loose boxes is more "time intensive" than handling a unitized load. Thus, another benefit of unitization is the amount of man hours saved in the movement and shipment of packaged goods. The end result is a quicker flow of goods throughout factories, warehouses and cross dock operations while utilizing fewer hands. TRANSPORTATION SAVINGS Since unitizing accelerates the speed at which goods are moved, carrier vehicles spend less time at loading docks. This reduction in loading time provides valuable cost savings to the company which unitizes as well as the customers receiving the unitized products.

Protection

SECURITY First, unit loads reduce incidents of pilferage and theft because packages from an enclosed load are difficult to remove.Moreover, unit loads are much easier to track than individually packaged products, making the "disappearance" of goods more detectable. MINIMIZE WAREHOUSING DAMAGE Unitized loads moved by forklift or pallet jack, are less likely to suffer damage than loose boxes carried by hand. Moving a unitized load throughout a warehouse minimizes the risk of product damage, for instance, a small carton or box may receive impacts from 30" or higher when accidentally dropped by hand, a unitized load will seldom receive 12" in drop. MINIMIZE TRANSIT DAMAGE It is less likely in LTL shipments that dense, heavy items will be parked on top of palletized unit loads. Hence, your goods stand a greater chance of not being damaged. The same cannot be said of cartons shipped individually.

Additional Benefits

INVENTORY CONTROL Unitizing products facilitates improvements in control of inventory since large unitized loads (as opposed to parcels of smaller ones) can be identified, counted and managed more easily. CUSTOMER SERVICE Customers appreciate the effects of unitizing because it allows them to unload their trailers and move goods through their warehousing systems more efficiently. FIRST POSSESSION THEORY: The "first possession" theory of property holds that ownership of something is justified simply by someone seizing it before someone else does.[1] This contrasts with the labor theory of property where something may become property only by applying productive labor to it, i.e. by making something out of the materials of nature.