WAEC Commerce 2017 Theory — Question 10

Model answer

Importance of warehouse to business: - warehousing enables the producer to continue production: even if the products have not been sold, with warehouse the wholesaler can store the goods so that there will be space in the factory to continue production. - it avails easy availability of goods to the market since in most cases it is located approximately to the market. - also, it helps to stabilised price as goods produced at same cost can be stored and sold in the future when prices of input might have risen. - it also helps to meet unforeseen or sudden changes in demand for goods thereby maintaining customers trust. - warehouse serves as last resort for goods mistakenly produced in excess of demand. - finally, warehouse provides the safest place to store goods.