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ABSTRACT
This article systematically addresses a logistics firm's warehousing investment problem from a long-term perspective. Various cost components are classified as either capital or variable costs and are based on cost behavior and tax regulations. Distinct cost behaviors are categorized and linked with the typical accounting controls. The effects of interest rates and taxes are also determined to facilitate proper investment decisions prior to model formulation. A mixed integer programming approach was employed to model related cost components and to rectify the warehousing investment drawback. The model involves novel scenarios currently under consideration in the firm investigated in this study. The solutions obtained herein provide further insight into the systematic warehousing analysis and profitability potential.