What is a central warehouse?
A central warehouse is managed by the retailer or a logistics service provider. This reduces stock levels and transportation costs and bundles the flow of goods. This means that a manufacturer's entire product range is stored in bundles, because the more items can be stored in one place, the greater the likelihood of centralization. In retail, the use of the central warehouse and a larger purchase volume creates more favorable purchase prices.
Advantages of a central warehouse:
- Warehouse management and organization are more effective
- Technical aids are worthwhile
- Minimum stock level is lower
- Optimum warehouse equipment
Disadvantages of a central warehouse:
- Longer transportation routes
- Possible waiting times for goods issue
