Question

In: Operations Management

Describe three different types of warehouses and the advantages of each?

Describe three different types of warehouses and the advantages of each?

Solutions

Expert Solution

3 Types of warehouses are

1. Public warehouse

A public warehouse is a warehouse that requires a license by the government to be operated by professionals. It is open for any company or firm to use the space for a certain fee. Wholesalers and manufacturers are the ones who utilize these services for storage. The functions of these warehouses are under the government's regulations.

Advantages

  • Public warehouses deliver more space to stock inventory and other goods.
  • They are stationed strategically so firms find them easily accessible.
  • They reduce the storage costs as they are standard prices for all who use it.
  • They are available anytime for the storage of goods or inventory.

2. Bonded warehouse

This type of warehouse can be owned by both government and private entities, however, a license is required by the private firms. The storage of imported goods is in this type of warehouse. Duties are charged to firms or companies that import goods and it is stored till the duty is paid.

Advantages

  • No tax is charged for goods when they are stored here.
  • The goods are safe in this warehouse because of its location.
  • The time period of storage can be longer than most warehouses.

3. Private warehouse

Private entities or companies own this type of warehouse and a few examples of such entities are manufacturers and wholesalers. The authority of the warehouse is entirely in the hands of these entities. The warehouse is constructed to fit products or goods tailored to the owners of the warehouse. This depends on if it is leased or not.

Advantages

  • The costs incurred in the storage of high volume goods are cheaper.
  • The manufacturer or retailer has more control over how the goods are being moved and stored here.
  • Eliminates errors of moving goods and storing.

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