Final answer:
Public and private warehouses serve to store goods, with Amazon showcasing the efficiency of private warehouses through computerization and economies of scale. Amazon's storage strategy exemplifies the cost-saving advantages of private warehousing versus public warehousing.
Step-by-step explanation:
The question pertains to the storage services provided by public warehouses compared to private warehouses. Both types of warehouses are designed to store goods; however, public warehouses offer storage facilities to different clients on a rental basis, while private warehouses are owned by firms to store their own goods. Looking at the example of Amazon, which started as an online retailer with no storefronts, leveraging economies of scales by storing items in large, computerized warehouses in low-rent locations. These warehouses utilize tech innovations like robotics and have relatively low-skilled workers, which contributes to reducing the average costs per sale.Amazon's approach to storage and distribution is an example of how the company has capitalized on economies of scale. By avoiding high retail rent, focusing on online sales, and operating extensive, highly computerized warehouses, Amazon has been able to keep costs low and efficiency high. This is in contrast to traditional bookstores that rely on retail spaces with high rent. Moreover, Amazon's transition to include retail locations in various states does not negate the significant role their warehouses play in economic scaling. The model demonstrates how private warehouses can be optimized to serve an extensive, decentralized consumer base, unlike the more traditional and localized use of public warehouses.Conclusion While there are differences in operation and ownership between public and private warehouses, companies like Amazon have shown how owning private warehouses can be strategically advantageous. By leveraging technology and strategic locations, they achieve lower average costs and greater market reach, illustrating the benefits of private warehousing in large-scale operations.