FUNCTIONS OF WAREHOUSING

1. A balance between supply and demand

Goods that are seasonally produced are stored in large quantities in the warehouse so that the supplies can be spread out throughout the year to meet the regular demand for the goods, e.g. wheat, padi and other agricultural products. Meanwhile, goods which are seasonal in demand can be stored in the warehouse during the off-peak season and are released only whenever they are needed, e.g. festive cards, Christmas decorations, winter clothing.

 

2. Storage of goods at various stages of production

Warehousing is required at every stage of production. Raw materials are stored in the warehouse before production starts. Intermediate products are stored until they are needed for further production (or they may be sold to other producers as components of final products) and the finished products are sent to the warehouse to await distribution to the final consumers.

3. A place for product assembly, product aggregation and bulk breaking

Warehouses are located at convenient places where the products from different factories are brought together for economical assembly, aggregation and bulk breaking. An assortment of goods in smaller lots will eventually be sent to their final destinations.

 

4. Specialized services

Activities like weighing, sorting, grading, blending, bottling, packing and branding can be carried out in the warehouse. It is equipped with specialized apparatus and facilities to perform the above services.

 

5. A place for display of goods

Goods can be viewed and examined at the warehouse by potential buyers before placing purchase orders, or even by bankers, before giving out loans to the traders who use these goods as security. A warehouse can even be turned into a large retail outlet where small retailers and consumers can shop for goods on a cash-and-carry basis.