OUTSOURCING THE WAREHOUSING FUNCTION - ECONOMIC AND STRATEGIC CONSIDERATIONS

This paper investigates the relationship of transaction costs and corp orate strategy to the use of third party warehouses. The study finds t hat the presence of transaction-specific assets is associated with a l ower likelihood of outsourcing, as is increasing firm size. However, h igh shipment volumes are associated with third party use. Significant interindustry differences are also indicated.