WAREHOUSING BUSINESS

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Master of Commerce – M.Com First Year Solved Assignments for July 2019 and January 2020 Admission Cycles

M.COM First Year Tutor Marked Solved Assignment

Course Code: IBO – 05
Course Title: International Marketing Logistics
Assignment Code: IBO-04/TMA/2019-20
Coverage: All Blocks

IBO – 05 International Marketing Logistics Solved Assignment for 2019-20

Q3.) Briefly comment on the following:

(b.) The rate of return from warehousing business is low and the gestation period is rather long.

Ans: The Rate of Return (ROR) from warehousing business is low and the gestation period is rather long. Warehousing has several strategic decisions like the number of warehouses, warehouse capacity, their location, and type of ownership. These involve heavy investments.

A warehouse is involved in various functions like assortment, storage of goods, etc. These start generating revenue over and above the investment made, as the warehouse change for consignment held, as per the time period.

The cost of ownership of a warehouse involves initial cost and financing the same. Similarly, owing more warehouses would mean better customer service but involves ownership and maintenance costs. By making the product available at the place where it is needed and when it is needed, the distribution system adds both time and place utilities to the product. For achieving this, the company must critically decide on the number of warehouses and the type of transport system to be used for product delivery.