ECONOMICS

Detailed explanation-1: -The cost which is incurred to store the goods is called a warehousing cost. This may includes rent of ware house and insurance of warehouse. This cost is an item of distribution overheads.

Detailed explanation-2: -Distribution costs are those costs incurred in making completed products ready for dispatch and their delivery to customers. Thus the warehouse rental and depreciation of delivery vehicles are distribution costs but the sales commission is clearly a selling cost.

Detailed explanation-3: -Warehouse rent is a part of distribution cost. Distribution costs (also known as “Distribution Expenses”) are usually defined as the costs incurred to deliver the product from the production unit to the end user. It is a broad terminology and it includes several costs.

Detailed explanation-4: -Distribution overheads: These are required to deliver and transport products and services to customers. Some examples of distribution overhead costs would be rent for godowns, packaging charges, delivery vehicle fuel costs, etc.

Detailed explanation-5: -Warehousing is an integral piece of the broader supply chain for physical products. Warehouses do not only serve as intermediary storage facilities-they also provide the ability for supply chain managers to reduce costs by optimizing inventory purchases, saving shipping costs and speeding up delivery times.