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Updated on September 29, 2009


A warehouse is a place where different goods are stored or accumulated for a temporary period. It created time utility. The need for warehouses arises out of the lack of adjustment between times of production and times of consumption of goods. At present time the goods are produced for in advance of demand. So before the goods are bright in the market, they should be stored. It is the warehouse which stores the goods from the time of production to the time they are sold. In this way warehouse removes the hindrance of time between the places of production and consumption.

Uses and Importance of Warehousing

Many goods are not produced regularly at the point where they are wanted for consumption and they must be stored from the time of production until they are wanted by the consumer, if they are to be used in satisfying human wants. Goods produced at a distance from the consumer must be transported to the consumer. In order to ensure on even supply, a stock of such goods must be maintained near the consumers as protection against delays and uncertainties of transport and to permit transport in economical units. Many agricultural goods produced seasonally are supplied to consumers more of less evenly throughout the year. Grain, Cotton, Tobacco and Sugar furnish can be stored for several years without any deterioration. The demand for some products is irregular. In such cases storage may be called into use so that production can be more regular.

If factories producing such goods are to be operated throughout the year, the goods produced in the “off months” must be stored until they are wanted by 1he consumers. Storage involves expense, but much expense in often less than the extra cost of providing buildings, machinery and labour to produce seasonal products as needed. Moreover, production and transport may be interrupted by fire, flood, strike, cold or storm. Storage is a safeguard against such risks.

It offers facilities to the traders or merchants to get loan from the credit agencies on the goods stored in the warehouse. The credit agencies will be in a position to give loans by the transfer of warehouse receipt, which is a negotiable instrument of title.

It offer goods facilities for the transfer of ownership of goods warehoused there in without the actual transfer of goods simply by transfer of warehouse warrants with the endorsement of the owner thereon.

It removes the hindrance of time which would otherwise be involved in obtaining possession of the goods from the places of their production.


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