Question

Write short notes on the following.

Warehousing as an auxiliary to Trade.

Answer 1

Warehousing refers to the activity of holding or preserving goods until they are sold for the final consumption. It helps business enterprises to store goods and facilitates the availability of goods as and when required. In this manner, it removes the time difficulty faced by the traders. The time difficulty primarily refers to the problems that arise due to the gap between the time of production and the time of consumption of goods, for instance, some goods maybe produced in a specific period like agricultural crops, but are demanded throughout the year. Similarly, some goods maybe produced throughout the year like sweaters but are demanded in a specific time period or season i.e. winters. In such a scenario, the producer may opt for producing the goods in large quantities and store the goods that are not consumed at that time. Therefore, in such cases, the warehousing facility helps the producers to store goods until they are sold to the final consumers.