December 2012
Intermediate to advanced
561 pages
22h 33m
English
Content preview from Logistics Management ,3rd Edition by Pearson
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Warehousing • 69
The relation between the cost of warehouse operation and optimum area served by the same
is best explained by the Bowman—Stewart formula. The major warehouse location criterion is
its proximity to the market. However, there is no restriction for the area it may serve. The cost of
delivery increases with the distance between the warehouse and the place of delivery. Therefore, the
cost of delivery is proportional to the square root of the area covered by the stocking point. Then
‘area covered’ related cost can be expressed as c 3 S
Thus the choice of location is decided on the basis of the cost of delivery. The other variable ...
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