case Study: Minnetonka Warehouse

• Critical analyze and present your perspective on:
  • Answer the following questions:
    • What are the evaluation criteria for Wayne to balance the demand and the availability of warehouse workers on the docks
    • How should Wayne review his choices, and problems as shared in the case?
    • Which of the four work team sizes results in the lowest cost to Wayne?
    • If you have been in a similar situation, how will you keep the employees busy while traffic is low?
    • Please base your answers on practical aspects, and not in an ideal world
      • It is important to share real information and experiences when answering the discussion posts
      • Ensure that your submission is supported by data, research, examples, and several news resources
  • you need to reference and use outside source

Case 10.1 Minnetonka Warehouse Wayne Schuller managed a warehouse in Minnetonka, Minnesota. His major concern was the number of workers to assign to his single unloading dock. After he began contracting with motor carriers for deliveries, he found that they were assessing him stiff penalties if their trucks had to wait to be unloaded. Wayne started adding larger crews at the unloading dock, but often they seemed idle because there were no trucks to unload. Wayne recalled from college that queueing theory might be applicable to such a problem.

The theory of queueing is an analysis of the probabilities associated with waiting in line, assuming that orders, customers, and so on arrival in some pattern (often a random pattern) to stand in line. A common situation is that on the average a facility may have excess capacity, but often it is more than full, with a backlog of work to be done. Often, this backlog has costs associated with it, including penalties to be paid or customers who walk away rather than wait. If a firm expands its capacity to reduce waiting times, then its costs go up and must be paid even when the facility is idle. Queueing theory is used to find the best level of capacity, the one that minimizes the costs of providing a service and the costs of those waiting to use the service.

After some further research specific to his firm, Wayne determined the following facts:

Trucks arrive randomly at the average rate of four per hour, with a deviation of plus or minus one.

A team of two warehouse workers can unload trucks at the rate of five per hour, or once every 12minutes.

A team of three warehouse workers can unload trucks at the rate of eight per hour, or once every 7.5minutes.

A team of four warehouse workers can unload trucks at the rate of 10 per hour, or once every 6 minutes.

A team of five warehouse workers can unload trucks at the rate of 11 per hour, or once every 4.45minutes.

The unloading times given in the preceding items (1-5) are average figures.

Each warehouse worker receives $14 per hour, must be paid for an entire shift, andbecause of union work rulescannot be assigned to other tasks within the warehouse.

Because of its contract with the carriers, the Minnetonka warehouse must pay the motor carriers that own idle trucks at the rate of $60 per hour while the trucks stand idle, waiting to be unloaded.

Use a software package that enables you to perform queueing operations. Note that the variable defined as a number of servers (# servers) denotes the number of teams of workers and accompanying equipment working as a complete server. In the situation described, the number of teams or servers is always 1, although the number varies in terms of costs and output.