5 MAJOR FUNCTIONS OF WAREHOUSE
FUNCTIONS OF WAREHOUSE
- Long term storage – The basic function of warehousing is the storage of goods. Surplus goods which are not needed immediately can be stored in the warehouse for the future. These surplus products can be consumed or supplied as per the customer’s need/requirement.
- Price stabilization – The warehouse plays an important role in the process of price stabilization. It is achieved by the creation of time utility by warehousing. It helps us to avoid the risk of a fall in the price of goods when their supply is in abundance and a rise in the price of goods during the slack season.
- Risk bearing – When the goods are stored in warehouses, they are exposed to many risks in the form of theft, deterioration, exploration, fire etc. Warehouses are constructed in such a way as to minimize these risks. Contract of bailment operates when the goods are stored in wave- houses. Accordingly, a warehouse keeper has to take reasonable care of the goods and safeguard them against various risks. For any loss or damage sustained by goods, the warehouse keeper shall be liable to the owner of the goods.
- Financing – Warehousing acts as a source of finance for the businessman for meeting business operations. Loans can be raised from the warehouse keeper against the goods stored by the owner. Goods act as security for the warehouse keeper. Similarly, banks and other financial institutions also advance loans against warehouse receipts.
- Grading and Packing – With advanced technologies, warehouse facilities also include packaging, processing, and grading of goods. Goods can be packed in convenient sizes as per the instructions of the owner.
WAREHOUSE QUALITIES TO LOOK AT BEFORE SELECTING A WAREHOUSE
Different warehouses come with unique qualities, but they do have a few general features which are efficient. The general qualities of different types of warehouses include;