1346434: 1624565: “Warehousing does not actually cost money unless you are
renting a space you intend to not rent once the product sells”
Wrong.
1.) 1
the opportunity cost of warehousing something
else
2.) 2
initial buy of necessary warehousing to meet
capacities
3.) 3
unmoving product reduces capacity for 1 and
increases amount needed for 2
Those are not costs of warehousing. #1 is simply the reduction in ability to make more money - which is not a cost (cost = $ lost). #2 is something that you already paid in the past and is the same whether or not you have to warehouse the item - thus also not a cost of warehousing. #3 is just mentioning the relationship between #1 and #2 - also not a cost.
If you read the rest of Gamer's post, his mention of money being "frozen" was referring to what you are talking about with #1, #2, and #3.
1.) A reduction in the ability to make more money is a loss of money. If you have
less money than you would if you did something else, then it is a cost.
If i have $5 and i can spend it on X
which will give me $7 after a year or Y which will give me $10 in a year if i
chose X i have lost $3. the cost of choosing X is $3.
2.) The sunk cost of buying warehousing
is not simply a sunk over-head cost if added warehousing is needed for future
products.
warehousing requires air-conditioning, security, people to make sure the roof
doesn't cave in insurance, management of inventory and digging through the
inventory... well you get the idea, the larger the building the more it costs.
If i buy a box of corn-dogs and put
it in my freezer not only do i have to pay for the cost of freezing it but i
also can't fit as many steaks in there unless I buy another freezer.
summation:
it costs money to hold ever
increasing amounts of product
{With prayer, and dentures, Omedus overcame his difficulties with cannibalism.}