I (Meaning and importance of Exports) Unit Structure

(c) 
Large Scale Production 
Warehousing is needed as production is now conducted on 
a large scale and that too in the anticipation of demand. There is 
time gap between production and consumption. Goods may be 
used by the consumers even one year after the actual production. 
During this period goods must be preserved properly. Warehousing 
is useful for keeping the goods intact during this interval. 
(d) 
Perishable commodities 
Warehousing is needed in order to bring reasonable safety 
to perishable commodities like eggs, fruits, flowers, medicines and 
so on. Such commodities are preserved properly and are made 
available to consumers at any time due to cold storage facilities. 
 
(e) 
Speculation 
Firms may maintain a large inventory of items, whose prices 
are highly volatile. Firms may speculate that prices may go up in 
the near future. Therefore, they may stock the products in 
warehouses to earn higher profits by selling them at a later date. 
(f) 
Product conditioning 
Some items need to be stored to attain the required level of 
quality. For example, ripening of fruits like mangoes is carried out 
under controlled temperature conditions after they are plucked from 
the trees. Such products may require appropriate warehousing. 
(g) 
Price Stability 
Warehousing plays an important role in bringing reasonable 
price stability in the case of consumer goods. Due to warehousing 
facilities, it is possible to bring proper balance between demand 
and supply of goods. It is this balance between the demand and 
supply that brings price stability. Warehousing is useful for timely 
deliveries of goods and the rush orders are also executed properly. 
(h) 
Delivery Schedules 
Proper stocking of finished goods helps a firm to adhere to 
the delivery schedule in the market. Due to stocking of adequate 
items, the firms can deliver them in the market as per the delivery 
schedule. This helps to generate corporate image and customer 
satisfaction. 

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