Storage costs: Because of economies of scale a large warehouse can be operated at a lower cost than can several smaller warehouses. These economies include the fact that larger warehouses are often better able to achieve better utilisation of space and equipment, overheads incurred in a large warehouse can be spread over a higher throughput of stock items and the amount of money tied up in stock tends to be less for a large depot than for several smaller warehouses11. In addition, each separate site will require its own management team and this increases distribution costs further. At some point, however, diseconomies of scale set in and the single central warehouse becomes less attractive in financial terms. This happens, for instance, when depots reach a size where they are difficult to manage and the distances between the wareh