ABSTRACT
Many manufacturing and distribution companies maintain large warehouses to store in-process inventories or components received from an external supplier. Businesses that lease storage space to other companies for temporary storage of material also own and maintain a warehouse. It has been argued that warehousing is a time-consuming activity that does not add value. Because additional paperwork and time are required to store items in storage spaces and retrieve them later when needed, the JIT manufacturing philosophy suggests that one should do away with any kind of temporary storage and maintain a pull strategy in which items are produced only as and when they are required. That is, an item should be produced at a certain stage of manufacturing, only if it is required at the next stage. Moreover, the quantity produced should directly correspond to the amount demanded at the next stage of manufacturing. JIT philosophy requires that the same approach be taken toward components received from suppliers. The supplier is considered as another (previous) stage in manufacturing. In practice, however, the need to maintain a suffi cient inventory of items because of the unreliability of suppliers and the need to improve customer service and respond to their needs quickly, make it not possible, or at least not desirable, to completely do away with temporary storage.
