Theory question 105
WarehousingCommerce 2 (theory)
(a) State four features of a warehouse.
(b) Explain six reasons why warehousing is important to a business.
Show the model answer
(a) Any four: located near transport links (roads, rail, ports); spacious and well ventilated; secure (fenced, guarded) and fire-proof; equipped with handling machines (forklifts, cranes); good lighting and drainage; cold rooms for perishables; proper record-keeping system.
(b) Any six, explained: stores goods until needed (time utility); keeps prices steady by releasing goods when scarce; protects goods from damage and theft; allows production ahead of demand/seasonal goods; enables bulk buying; place for grading, packing and blending; bonded warehouses allow duty to be paid when goods are sold; goods can be used as security for loans (warrants).
Link each reason in (b) to a benefit for the business.