Question

Public warehousing makes more sense than private warehousing when...?

a) volume is high and very predictable with little variation in demand
b) volume is low with high variability in demand and significant seasonality
c) customers are close to your facility and products are not seasonal
d) customer service requirements are low and market density is high
e) products are valuable and require high level of security

Answer 1

Public warehousing is a better choice when the volume of goods is low, with high demand variability and significant seasonality, as it is flexible and less costly than maintaining a private warehouse.

Step-by-step explanation:

Public warehousing makes more sense than private warehousing when b) volume is low with high variability in demand and significant seasonality. This scenario is ideal for public warehousing because it provides the flexibility to handle fluctuating demand without the financial burden and operating costs associated with maintaining a private warehouse. Additionally, public warehousing can provide specialized storage facilities, such as refrigeration for perishable goods, that might be cost-prohibitive to implement on a private basis.