The degree of demand and price uncertainty has a significant influence on the appropriate portfolio of long- and short-term warehousing space that a firm should carry.

The degree of demand and price uncertainty affects a firm's inventory management strategy, including their decision on the appropriate portfolio of long- and short-term warehousing space. A highly uncertain demand and price environment may require a larger proportion of short-term warehousing space to allow for greater flexibility, while a more stable environment may allow for a larger proportion of long-term warehousing space to capture cost savings.