Question

Give any three functions of Warehouses.

Explain the functions of a modern warehouse.

Discuss the functions of warehouses in home trade and international trade.

Discuss six functions of warehouses.

Answer 1

1. Storage of goods: The basic function of warehouses is to store the surplus stock of goods. Goods that are in surplus are stored and preserved until they are needed. In this way, warehouses equalise supply with demand from item to time and place to place. Warehouses thereby create time utility and place utility.
2. Price stabilisation: Warehouses help in stabilising prices by bringing about an equalisation of demand and supply. Sudden falls in the prices of goods when the supply is at its peak, and steep rises in their prices when the supply is negligible are avoided. Warehouses act as reservoirs for surplus stocks and reduce fluctuations in prices.
3. Transfer of risk: The warehouse keeper bears the risk of loss or damage to goods during storage. The risk of keeping the goods is transferred to the warehouse-keeper as soon as possible. the goods are handed over to him for storage. In case of a loss of goods, the warehouse will bear the risk.
4. Financing: The warehouse keeper advances money to the owner of goods against the security of the goods deposited in the warehouse. Loans can also be easily raised from banks on the security of receipts issued by the warehouses.
5. Regular production: Warehouses enable manufacturers to produce goods in anticipation of demand. They remove the time lag between production and consumption of goods. Storage of raw materials helps ensure regular production of goods.
6. Inspection before purchase: Ware-houses provide facility to buyers to examine the goods before purchase and select goods. They help seller in exhibiting and selling of goods.
7. Payment of customs duties: Bonded warehouses avoid the problem of paying customs duty immediately. The payment of duty on the imported goods can be deferred until the goods are sold. Warehouses open goods at the time of checking by the customs authorities.
8. Economy in transportation: Warehousing provides economies in bulk buying of goods. Warehouses help to minimise the cost of loading and unloading goods from trains and ships.
9. Elimination of wastage: Proper storage of surplus goods in warehouses eliminates wastage of foodgrains and perishable goods.
10. Employment: Warehousing has by itself become an industry or a specialised branch of business. Warehouses and the operations concerned with them provide employment to a very large number of people.