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Storage
Warehousing is the act of storing goods that will be sold or distributed later. While a small, home-based business might be warehousing products in a spare room, basement, or garage, larger businesses typically own or rent space in a building that is specifically designed for storage.
Although storage is being avoided, there are number of reasons why we will never completely get rid of storage. Causes for storage include:
- customer service, ensuring availability of products
- unreliable supplier
- minimization of order and supply costs; The total costs can be lower with a large order
- minimization of order and supply costs; The total costs can be lower with a large order
- economic production batches
- production’s intermediate storage
- postponing payment for import duties on imported goods by stocking goods in intermediate stocks in the customs warehouse
- raw materials increase pressure in the price