Discuss and Illustrate the Economic Justification for Establishing a Warehouse


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When a firm locates a temporary inventory in a specific location it is called Spot Stocking.


Study Questions

1.Discuss and illustrate the economic justification for establishing a warehouse.

2.What role are warehouse operators playing in postponement strategies?

3.Discuss and illustrate the role of warehouses in reverse logistics.

Challenge Questions

1.Assume you work for a pharmaceutical company and you are faced with an unprec­edented nationwide recall. The product in question is not considered a health threat, but the recall has high profile in the public news media. How would you proceed? Be specific concerning your sequence of actions, supporting logic and public relations


Identify (circle) TRUE/FALSE choice that best completes the statement or answers the following:

1. When a company cross-docks products, the products are generally in storage for several days.


2. A disadvantage of RFID tags versus UPC codes is that RFID is more expensive.


3. The modern concept of a distribution center means that products are never placed in storage.


4. The warehouse functionality of sorting means that products are being assembled in custom as-sortments to meet the needs of specific orders.


5. Cross docking is a form of sorting.


6. Value Added Services (VAS) are seldom performed by Integrated Service Providers (ISP).


7. When a firm locates a temporary inventory in a specific location it is called Spot Stocking.

8. Distribution warehouses that are dedicated to a specific firm are called public warehouses.


9. The best approach to developing a distribution warehouse is to locate a vacant building and then design a material handling system that will work in that structure.


10. Wave selection means that multiple orders are being picked simultaneously.


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