Functions and Types of Warehousing | Class 12
Functions and Types of Warehousing
- Warehouse refers to the storage of goods.
- Warehouses preserve goods on a large scale in a systematic and orderly manner.
- They provide protection to goods against heat, wind, storm, moisture, etc., and also cut down losses due to spoilage, wastage, etc. this is the basic function of every warehouse.
- Definition: -A warehouse is defined as “an establishment for the storage or accumulation of goods”.
There are many other functions in addition to these basic functions which are as follows:
Functions of warehouse
- Storage of goods: –The basic function of warehouses is to store large stock of goods. These goods are stored from the time of their production or purchase till their consumption or use.
- Protection of goods: -a warehouse provides protection to goods from loss or damage due to heat, wind, dust, etc. it making special arrangements for different products according to their nature. It also helps to reduce the losses due to spoilage or wastage during storage.
- Financing: – Warehousing of goods also enables to obtain finance from banks. Banks grant loans against the security of goods.
- Risk-bearing: -The entire responsibility of the goods stored in the warehouse is passed to the warehouse keeper, once the goods are handed over to him for storage. Thus, the risk of loss or damage to goods in storage is borne by the warehouse-keeper.
- Grading and Branding: – Warehouses also perform the functions of grading and branding of goods on behalf of the manufacturer, wholesaler, and importer of goods. It also provides facilities for the packaging of goods for the convenience of handling.
- Safety to perishable Goods: – It provides safety to perishable goods. Perishable goods like fish, meat, etc., can be preserved in cold storage.
- Transportation: -Warehouses can provide transport facilities to the bulk depositors. It collects goods from the place of production and also sends goods to the place of delivery at the request of the depositors.
- Time and place utility: – Warehouses create time utility by preserving the goods till it is demanded. It also creates place utility by providing the goods at the place, where they are required.
Types of Warehouses
- Private warehousing: -Private warehousing is owned and managed by the manufacturers or traders to store their own goods. They are found mostly in industrial and commercial centers. In this warehouse, the goods can be stored and removed without formalities and personal care of the goods is taken.
- Public/commercial warehouses: –They are also known as licensed warehouses. These types of warehouses require a license from the government. They are owned and managed by individuals, firms, companies, and others. They are generally located near railway stations, highways, airports, seaports, etc.
- Government warehouses: -These warehouses are owned, managed, and controlled by Central and State governments public corporations, or local authorities. It is difficult for the small traders, farmers, businessmen, etc. to own a warehouse, so these government warehouses assist them in storing their goods at a nominal charge.
- Bonded Warehouses: -Bonded warehouses are licensed by the government for storing imported goods till the custom duty is not paid. They are located near the ports. They are either operated by the government or customs authorities. The goods are held in bond and cannot be withdrawn without paying the customs duty. Such warehouses are very useful to importers and exporters
- Duty paid warehouses: -If an importer faces any problem in the transportation of goods, after making payment of duty, then goods can be stored at Duty Paid Warehouses. All duty paid warehouses are public warehouses that are available to all the importers whether big or small. These warehouses are more helpful for some businessmen, who re-exports the goods.
- Co-operative warehouses: -These warehouses are owned, managed, and controlled by the co-operative societies. They provide warehousing facilities in rural areas. These types of warehouses are very useful for farmers and traders. They provide warehousing facilities at the most economical rates to the members of the society and also to the public.
- Cold storages warehouse: – They are suitable for perishable goods. In cold storage goods like fish, meat and fruit can be preserved. They make available seasonal goods throughout the year. The maintenance cost of cold storage is high. In India, cold storages are popular in cities and towns.
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