Question: 4 . Your third - party warehouse has space available for 1 0 , 0 0 0 pallets and you have 2 0 forklift operators

4. Your third-party warehouse has space available for 10,000 pallets and you have 20 forklift operators per 8-hour day for 250 working days a year. If the average trip from receiving to storage to shipping is 10 minutes per pallet, how many inventory turns a year could you support for a full warehouse?
Warehouse inventory turns at the rate of two times per month. One thousand dollars worth of merchandise occupies 100 cubic feet of warehouse space and can be stacked 10 ft. high. The product density is $5 per lb. Given aisles, administrative space, and normal operating efficiency, only 40 percent of the total warehouse space is actually used for storage.
A private warehouse can be constructed and equipped for $35 per sq. ft. and can be amortized over 20 years. The cost of operation is $20 for one thousand dollars worth of throughput. Annual fixed costs amount to $10 per sq. ft. of total space.
Space can also be rented for a storage charge on inventory of $0.06 per lb per month and handling charge of $0.05 per lb of throughput.
(Hint: Use density to change a $ unit into a lb unit if required)

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