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Public
Public
operates as an independent business
provides a range of for-hire services, i.e. storage, handling and transport.
charges clients a basic fee for in and out handling plus storage.
charges are assessed based on the size (e.g. cases, pallets) or weight of products.
Special or value-added services provided are priced on a negotiated basis.
Private
Private
usually operated by the business that owns the product that is stored and handled in the facility.
building itself may be owned or leased.
private warehouse is usually considered by companies with large volumes of inventory and stable demand patterns due to high fixed costs.
Source: Singapore University of Social Sciences, LOG207 Warehousing and Material handling, Study Guide (2018).
Advantages
Advantages
Conservation of Capital
Minimise level of Risks
Flexible in getting space
Provide better Economies
Relieve from facility management and costs
Clarity on warehousing costs
Disadvantages
Disadvantages
Lacks in control
Lacks in service specialization
Constraints during peak period
Possible higher operational costs (i.e. the public warehouse needs to make a profit)
Advantages
Advantages
Better control on facility set up, equipment
Better control on resources and processes
Flexibility on facility design
Lower running costs in long term
Tax benefits
Potential return in investment
Disadvantages
Disadvantages
High costs of investment
Opportunity costs
Not easily scalable
Potential loss of investment
Ponder:
Ponder:
In your opinion, do you prefer to own a public or private warehouse?
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