Warehouse operations

The decision not to own a fleet of trucks to provide delivery services to the clients seems to be a good one . A cost /benefit analysis of this decision will show that the costs of owning , running and maintaining this fleet far exceed the benefits of having control over the distribution process of the business . This aspect of the business can be covered by a by a delivery contract between the warehouse owners and a distribution company . The warehouse operation will not have to diversify its business operations to cope with the need

to manage the delivery part of the business model

The business model for a warehouse operation requires some provision for delivering goods to customers from the warehouse . This can be fulfilled by a contract between the warehouse and a trucking company that will provide deliveries of the goods to customers , that should contain some provision for what will happen in the case of late or lost deliveries Being able to separate the two businesses and have a relational contract between the warehouse operators and the couriers will let the warehouse operation concentrate on its core business model and not have to worry about diversifying into a delivery business

The costs of owning and operating a fleet of trucks include salaries for drivers as well as insurance and vehicle maintenance costs . However these costs are offset against the benefits of having complete control over the delivery process , and having to manage and regulate these costs . A contract between...