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Copyright ? 2001 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin 10-* * Figure 1-3 * * * * * * * * * CHAPTER 10 Warehousing Cost trade-offs in Marketing and Logistics Product Order processing and information costs Inventory carrying costs Place/customer service levels Order processing and information costs Price Lot quantity costs Warehousing costs Transportation costs LOGISTICS MARKETING Uses of Warehousing Manufacturing support Product - mixing Consolidation Breakbulk Factors Influencing Warehousing in the Future Time - The best warehouse operations are those designed to reduce every aspect of order cycle time. Quality - Users now expect performance that approaches perfection. Asset productivity - Reduce total cost, reuse, and recycle. New kind of workforce - Requirements for both management and labor will change significantly. Advantages of Public Warehousing Conservation of capital Use of space to meet peak requirements Reduced risk Economies of scale Flexibility Tax advantages Specific knowledge of storage and handling costs Disadvantages of Public Warehousing Effective communication may be difficult because of system incompatibility Specialized services may not always be available. Space may not be available on demand. Advantages of Private Warehousing Control Flexibility Less costly Better use of human resources Tax benefits Intangible benefits Copyright ? 2001 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin 10-* * Figure 1-3 * * * * * * * * *
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