Question

Explain warehousing and its functions?

Answer 1

Warehousing involves storing goods in a scientific and organised manner to maintain their value and quality. Warehouses not only provide storage services but also logistical services by providing the right place for the right quantity at the right time and at the right cost.

The following are some of the functions performed by warehouses.

(i) Storage: Warehouses facilitate the storage of goods and raw materials that are not required immediately for sale or for manufacturing, and protect them from spoilage or damage.

(ii) Value-added services: They perform value-added services, such as grading the quality of products, packaging and labelling, for producers.

(iii) Financing: The owner of the goods or raw materials stored in a warehouse can use the warehouse receipt as a security for borrowing money from banks or other financial institutions.