L7 Facility Sizing

Question 1

Private warehouse

Answer 1

• Privately owned warehouses

- Sometimes occupied in long term lease 3+ years

Question 2

Public warehouse

Answer 2

• Provided by firms specializing in warehousing services (e.g. 3rd party logistics)
• Short term rental (month to month)

Question 3

Public warehouse throughput volume

Answer 3

• More suitable for low throughput volume and low utilization of space
• Flexible to adjust short term rental space

Question 4

Private warehouse throughput volume

Answer 4

Less expensive than public warehouse if utilization of space and throughput volumes are high ( and is projected to remain high over the long term)

Question 5

Private warehouse operating advantages

Answer 5

High degree of control over warehousing operations:

• commonly used if storage requires specialized personnel and equipment (e.g. pharma and certain chemicals)
• better control over customer service

Space can serve as a base for sales office, private truck fleet …

Question 6

Public warehouse operating advantages

Answer 6

• usually not a lot of value-added services
• No fixed investment (less risks)
• Location flexibility: easy and inexpensive to change warehouse locations as market shifts
• Lack of long term commitment

Question 7

Contract warehouse

Answer 7

Intermediate choice between public and private warehouse (usually >1 year)