Capital Changes In Warehousing

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Today’s environment in which businesses operates is always changing. This alteration in the environment affects various aspects of businesses. Warehousing is one of those aspects that are always affected by the change process. Capital is essential for business for its smooth functioning, when cost of capital changes it creates huge problems for businesses. The size and cost related to capital affects the location and quantity of inventories as well. Less capital availability will cause severe problem while making decision regarding warehousing (Ackerman, 1990). Obviously, new infrastructure cannot be built in this case. In this scenario company will cut inventory supplies either it will ask customer or suppliers to hold company’s inventory.…show more content…
For many companies it has served as the biggest logistics cost. Strong relationship with transportation providers lead to lower logistics cost. If logistics cost becomes negotiable then the costs can be saved in warehousing process. With the evolution of supply chain processes on global level, global logistics functioning is also affected. Companies require highly skilled and competent staff to manage the warehousing processes in contrast to the changing world environment. Technology is another important factor in today’s world. Technology across the world is changing rapidly. It has also revolutionized the warehousing processes. When there was manual supply and demand control of inventory in warehouse it was difficult to keep record of it, now a days computers have made warehousing an easier task. Inventory management can easily be done by using these computers and other supportive devices. Vouchers related to the receiving and issuances of goods are electronically managed. The timings of these receiving’s and issuances can also be traced by using latest technology. With the use of computers different reports related to stock can also be prepared within no time. The quantity of stock released and quantity that is still in hand can easily be identified by using computers and relevant software’s (Raden,…show more content…
Warehouse should serve the purpose of time and place utility both for the company and customer. If a company is producing in one region and supplies its production to other region then it has to decide the location where to store the output. The cost of storing in both locations will be determined and the place with less cost will be selected to construct warehouse. Some companies in order to reduce the ware housing costs are using just in time inventory management system which means that products are purchased or manufactured only when there is demand for these products. Population is also major factor in determination of location of warehouse. The target market approach to construct warehouse states that the stores to stock inventory should be built near target market, so that they can be served in short span of time. Warehouse location in addition to target market is sometimes also dependent on costs as well. Some companies constructs warehouses in those regions where land and construction cost is less, they compromise on transportation

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