Using this example

Determine the handling cost if the labor cost is $.0315 per feet. Each rack as a three level high and the pallet deep is 4. Also determine the storage utilization. Space between the rack and the wall needs to be 18 Figure 11: Warehouse Handling Cost Exercise. Source: Dr. Jose A. Morales (2020) If we have a handling cost per feet of $0.025, how much the warehouse will be spending in moving materials from receiving to the production area? In this problem we have 3 materials (A, B,C). We need to determine the distance for loading the pallets in the rack and the distance to unloading and transfer to production. We assigned two racks for A, one for B and two for C. The distance associated with the width and deep of the rack will be the average since the rack can be empty or loaded during the year. Total Transferring Distance: Total Handling Cost: (307,400$0.026)=$7,685