Public Warehousing

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The chief executive officer (CEO) of your firm is being asked to approve a major expenditure for a new warehouse. Before he approves it, you were asked to discuss with him an alternative he has heard of: public warehousing. Prepare a short discussion covering the following specific points:

  • What exactly is public warehousing?
  • What are the pros and cons of using it?
  • What is the range of services they typically offer?
  • If the objective is to avoid the cost of building and staffing a new warehouse for the firm, which of these services, or others as well, would you ask the public warehouse to perform for you? Why?
  • What is the downside of using public warehousing?
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