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NIOS Class 10 Business Studies Chapter 6 Warehousing
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Warehousing
Chapter: 6
NIOS TEXTBOOK QUESTIONS ANSWERS
Intext Questions 6.1
Which of the following statements are true and which are false?
(i) Warehousing removes the hindrance of time.
Ans:- True.
(ii) Warehousing is not an important auxiliary to trade.
Ans:- False.
(iii) The objectives of warehousing may be to carry over the surplus goods, for consumption in future during the period of scarcity.
Ans:- True.
(iv) Warehousing is not used to store the goods of seasonal nature.
Ans:- False.
(v) Warehousing is not useful for large scale trading.
Ans:- False.
(vi) Warehousing helps in continuous production of goods in the factories.
Ans:- True.
Intext Questions 6.2
Fill in the blanks with suitable words given in brackets:
(i) Food Corporation of India maintains ___________ warehouses. (Government, private, bonded).
Ans:- Government.
(ii) Warehouses used exclusively by the traders to store their own goods are known as ___________ warehouses. (Bonded, public, private).
Ans:- Private.
(iii) Licence from the government is not required to start a ____________ warehouse. (Bonded, private, public).
Ans:- Private.
(iv) Bonded warehouses are generally found near ____________________. (industrial area, ports, commercial centres).
Ans:- Ports.
(v) Goods for which import duty is not paid are kept in ___________ warehouses. (Private, public, bonded).
Ans:- Bonded.
Intext Questions 6.3
I. Which of the following statements are true and which are false?
(i) The basic function of warehousing is to store the goods.
Ans:- True.
(ii) The loss occurred in a warehouse is not borne by the warehouse keeper.
Ans:- False.
(iii) Warehouse-keeper’s warrant can serve as a security for loans from bank.
Ans:- True.
(iv) Warehousing helps in continuous production and regular supply of the goods.
Ans:- True.
(v) Warehousing does not create any employment opportunities.
Ans:- False.
II.
| Multiple Choice Questions |
(i) Which of the following is not a need for warehousing?
(a) Quick supply of Goods.
(b) Seasonal production goods.
(c) Large-scale production.
(d) Small scale production.
Ans:- (d) Small scale production.
(ii) Which of the following type of warehouses are situated at Airports and Seaports?
(a) Public warehouses.
(b) Government warehouses.
(c) Bonded warehouses.
(d) Co-operative warehouses.
Ans:- (c) Bonded warehouses.
(iii) The warehouses owned and managed by the Manufacturers or Traders to Store exclusively their own stock of goods are known as.
(a) Government warehouses.
(b) Private warehouses.
(c) Public warehouses.
(d) Cooperative warehouses.
Ans:- (b) Private warehouses.
(iv) Which of the following is not a function of warehouses?
(a) Risk bearing.
(b) Financing.
(c) Transport facility to every customer.
(d) Protection of good.
Ans:- (c) Transport facility to every customer.
(v) Which of the following is not an advantage of warehouses?
(a) Useful for small businessmen.
(b) Available at convenient location.
(c) Do not create employment.
(d) Make easier the Availability of Finance.
Ans:- (c) Do not create employment.
| Terminal Exercise |
1. What is meant by Warehousing?
Ans:- ‘Warehousing’ refers to the activities involving storage of goods on a large scale in a systematic and orderly manner and making them available conveniently when needed. In other words, warehousing means holding or preserving goods in huge quantities from the time of their purchase or production till their actual use or sale.
2. Explain the need for warehousing.
Ans:- Warehousing is necessary because of the following reasons:
(i) Seasonal Production: You know that agricultural commodities are harvested during certain seasons, but their consumption or use takes place throughout the year. Therefore, there is a need for proper storage or warehousing for these commodities, from where they can be supplied as and when required.
(ii) Seasonal Demand: There are certain goods which are demanded seasonally, like woollen garments in winters or umbrellas in the rainy season. However, the production of these goods takes place throughout the year to meet the seasonal demand. So there is a need to store these goods in a warehouse to make them available at the time of need.
(iii) Large-scale Production: In the case of manufactured goods, now-a-days production takes place to meet the existing as well as future demand of the products. Manufacturers also produce goods in huge quantities to enjoy the benefits of large-scale production, which is more economical. So the finished products, which are produced on a large scale, need to be stored properly till they are cleared by sales.
(iv) Quick Supply: Both industrial as well as agricultural goods are produced at some specific places but are consumed throughout the country. Therefore, it is essential to stock these goods near the place of consumption so that without making any delay these goods are made available to the consumers at the time of their need.
(v) Continuous Production: Continuous production of goods in factories requires adequate supply of raw materials. So there is a need to keep sufficient quantities of raw material in the warehouses to ensure continuous production.
(vi) Price Stabilization: To maintain a reasonable level of the price of the goods in the market there is a need to keep sufficient stock in the warehouses. Scarcity in supply of goods may increase their price in the market. Again, excess production and supply may also lead to fall in prices of the product. By maintaining a balance of supply of goods, warehousing leads to price stabilisation.
3. Describe any six characteristics of an ideal warehouse.
Ans:- However, a warehouse is said to be an ideal warehouse if it possesses certain characteristics, which are given below:
(i) Warehouses should be located at a convenient place near highways, railway stations, airports and seaports where goods can be loaded and unloaded easily.
(ii) Mechanical appliances should be there for loading and unloading the goods. This reduces the wastages in handling and also minimises handling costs.
(iii) Adequate space should be available inside the building to keep the goods in proper order.
(iv) Warehouses meant for preservation of perishable items like fruits, vegetables, ‘eggs and butter etc. should have cold storage facilities.
(v) Proper arrangements should be there to protect the goods from sunlight, rain, wind, dust, moisture, pests etc.
(vi) Sufficient parking space should be there inside the premises to facilitate easy and quick loading and unloading of goods.
4. Classify the various types of warehouses. Explain them briefly.
Ans:- In order to meet their requirement various types of warehouses came into existence, which may be classified as follows:
(i) Private Warehouses.
(ii) Public Warehouses.
(iii) Government Warehouses.
(iv) Bonded Warehouses.
(v) Co-operative Warehouses.
The types of warehouses are discussed below:
(i) Private Warehouses: The warehouses which are owned and managed by the manufacturers or traders to store, exclusively, their own stock of goods are known as private warehouses. Generally these warehouses are constructed by the farmers near their fields, by wholesalers and retailers near their business centres and by manufacturers near their factories.
(ii) Public Warehouses: The warehouses which are run to store goods of the general public are known as public warehouses. Any one can store his goods in these warehouses on payment basis. An individual, a partnership firm or a company may own these warehouses. To start such warehouses a licence from the government is required. The government also regulates the functions and operations of these warehouses. Mostly these warehouses are used by manufacturers, wholesalers, exporters, importers, government agencies, etc.
(iii) Government Warehouses: These warehouses are owned, managed and controlled by central or state governments or public corporations or local authorities. Both government and private enterprises may use these warehouses to store their goods.
(iv) Bonded Warehouses: These warehouses are owned, managed and controlled by government as well as private agencies. Private bonded warehouses have to obtain a licence from the government. Bonded warehouses are used to store imported goods for which import duty is yet to be paid.
(v) Co-operative Warehouses: These warehouses are owned, managed and controlled by co-operative societies. They provide warehousing facilities at the most economical rates to the members of their society.
5. Distinguish between a public and a private warehouse.
Ans:-
| Public warehouse | Private warehouse |
| The warehouses which are owned and managed by the manufacturers or traders to store, exclusively, their own stock of goods are known as private warehouses. | The warehouses which are run to store goods of the general public are known as public warehouses. |
| Generally these warehouses are constructed by the farmers near their fields, by wholesalers and retailers near their business centres and by manufacturers near their factories. | Any one can store his goods in these warehouses on payment basis. An individual, a partnership firm or a company may own these warehouses. To start such warehouses a licence from the government is required. |
| The design and the facilities provided therein are according to the nature of products to be stored. | The government also regulates the functions and operations of these warehouses. Mostly these warehouses are used by manufacturers, wholesalers, exporters, importers, government agencies, etc. |
6. Explain the functions of warehouses.
Ans:- In addition to this, warehouses now-adays also perform a variety of other functions, which are as follows:
(i) Storage of goods: The basic function of warehouses is to store large stock of goods. These goods are stored from the time of their production or purchase till their consumption or use.
(ii) Protection of goods: A warehouse provides protection to goods from loss or damage due to heat, dust, wind and moisture, etc. It makes special preventive arrangements for different products according to their nature. It cuts down losses due to spoilage and wastage during storage.
(iii) Risk bearing: Warehouses take over the risks incidental to storage of goods. Once goods are handed over to the warehouse-keeper for storage, the responsibility of these goods passes on to the warehouse-keeper. Thus, the risk of loss or damage to goods in storage is borne by the warehouse keeper.
(iv) Financing: When goods are deposited in any warehouse, the depositor gets a receipt, which acts as a proof about the deposit of goods. The warehouses can also issue a document in favour of the owner of the goods, which is called warehouse-keeper’s warrant.
(v) Processing: Certain commodities are not consumed in the form they are produced. Processing is required to make them consumable. For example, paddy is polished, timber is seasoned, fruits are ripened, etc. Sometimes warehouses also undertake these activities on behalf of the owners.
(vi) Grading and branding: On request warehouses perform the functions of grading and branding of goods on behalf of the manufacturer, wholesaler or the importer of goods. Warehouses also provide facilities for mixing, blending and packaging of goods for the convenience of handling and sale.
(vii) Transportation: In some cases warehouses provide transport arrangements to the bulk depositors. It collects goods from the place of production and also sends goods to the place of delivery on request of the depositors.
7. What is meant by a public warehouse? State any three functions of a public warehouse.
Ans:- The warehouses which are run to store goods of the general public are known as public warehouses. Any one can store his goods in these warehouses on payment basis. An individual, a partnership firm or a company may own these warehouses.
The three functions of warehousing are discussed below:
(i) Inventory management: Inventory management refers to the process of storing, ordering, and selling of goods and services. The discipline also involves the management of various supplies and processes.
(ii) Shipping and receiving: public warehousing provides flexibility in shipping and receiving inventory, ensuring convenience and efficiency for customers.
(iii) Quality control: Warehouse quality control is a method of monitoring and evaluating the quality of your warehouse and its operations. It ensures that all work is being done according to the standard set by your business and can help you reduce errors, improve warehouse efficiency, and save money.
8. Describe the advantages of warehouses to the businessmen.
Ans:- Warehousing offers many advantages to the business community.
Whether it is industry or trade, it provides a number of benefits which are listed below:
(i) Protection and Preservation of goods: Warehouses provide necessary facilities to the businessmen for storing their goods when they are not required for sale. It provides protection to the stocks, ensures their safety and prevents wastage. It minimises losses from breakage, deterioration in quality, spoilage etc.
(ii) Regular flow of goods: Many commodities like rice, wheat etc. are produced during a particular season but are consumed throughout the year. Warehousing ensures regular supply of such seasonal commodities throughout the year.
(iii) Continuity in production: Warehouse enables the manufacturers to carry on production continuously.It helps in providing seasonal raw material without any break, for production of finished goods.
(iv) Convenient location: Warehouses are generally located at convenient places near road, rail or waterways to facilitate movement of goods.
(v) Easy handling: Modern warehouses are generally fitted with mechanical appliances to handle the goods. Heavy and bulky goods can be loaded and unloaded by using modern machines, which reduce the cost of handling such goods.
(vi) Useful for small businessmen: Construction of their own warehouse requires heavy capital investment, which small businessmen cannot afford. In this situation, by paying a nominal amount as rent, they can preserve their raw materials as well as finished products in public warehouses.
(vii) Creation of employment: Warehouses create employment opportunities both for skilled and unskilled workers in every part of the country. It is a source of income for the people, to improve their standards of living.
(viii) Facilitates sale of goods: Various steps necessary for sale of goods such as inspection of goods by the prospective buyers, grading, branding, packaging and labelling can be carried on by the warehouses.
(ix) Availability of finance: Loans can be easily raised from banks and other financial institutions against the security of the warehouse keeper’s warrant. In some cases warehouses also provide advance to the depositors of goods on keeping the goods as security.
(x) Reduces risk of loss: Goods in warehouses are well guarded and preserved. The warehouses can economically employ security staff to avoid theft, use insecticides for preservation and provide cold storage facilities for perishable items.
9. How is a bonded warehouse useful for the importers?
Ans:- Bonded warehouses can provide all necessary documentation and paperwork to ensure that the goods can be shipped with ease. Cost Savings: Deferred Duties and Taxes: One of the primary advantages of bonded warehouses is the ability to defer the payment of import duties and taxes until the goods are released from the warehouse. This can improve cash flow and reduce the financial burden on the company.Bonded warehouses offer flexibility in managing inventory. Companies can hold goods for extended periods without the pressure of immediate customs clearance, allowing for better supply chain planning. Businesses can strategically time their exports to take advantage of favourable market conditions or currency exchange rates.Bonded warehouses may provide controlled environments that can help maintain the quality of goods, especially for products that are sensitive to temperature, humidity, or other environmental factors.
10. Warehousing is one of the important auxiliaries to trade. Explain this statement in about 60 words.
Ans:- Warehousing is one of the important auxiliaries to trade. It creates time utility by bridging the time gap between production and consumption of goods. It is essential in maintaining the supply of the product, as per the demand in the market.Thus, the need for storage arises both for raw material as well as finished products. Storage involves proper arrangement for preserving goods from the time of their production or purchase till the actual use or sale.Warehousing helps companies satisfy the demands of their customers for fast and efficient order fulfilment, which has become more aggressive in the digital era.
