BALLOU12 - 12-1Storage and Handling DecisionsChapter...

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Unformatted text preview: 12-1Storage and Handling DecisionsChapter 12“Perfection is not attainable, but if we chase perfection, we catch excellence.”Vince Lombardi12-2Storage/Handling Decisions in Inventory StrategyPLANNINGORGANIZINGCONTROLLINGTransport Strategy• Transport fundamentals• Transport decisionsCustomer service goals• The product• Logistics service• Ord. proc. & info. sys.Inventory Strategy• Forecasting• Inventory decisions• Purchasing and supply scheduling decisions• Storage fundamentals•Storage decisionsLocation Strategy• Location decisions• The network planning processPLANNINGORGANIZINGCONTROLLINGTransport Strategy• Transport fundamentals• Transport decisionsCustomer service goals• The product• Logistics service• Ord. proc. & info. sys.Inventory Strategy• Forecasting• Inventory decisions• Purchasing and supply scheduling decisions• Storage fundamentals•Storage/handling decisionsLocation Strategy• Location decisions• The network planning process12-3Storage DecisionsSite Selection•Finds a specific real estate site as a storagelocation•Weighted checklist is a good approach. Recall,FactorMarginalFactorsWeightsscoresscore125102919............124832Weighted score28612-4Storage Decisions(Cont’d)Sizing the Facility •From inventory policy, determine the amount of inventory to be stored, that is, space needed •Determine the facility’s seasonal use •Balance the use of privately-owned space with rented space—a mixed strategySpace requirements, sq. ft.Rented spacePrivately- operated spaceTimeMixed Strategy for Warehouse SpaceNeed for some spaceis seasonal12-512-6PRIVATELY OPERATED RENTED MonthWarehouseThroughput,lb.SpaceRequire-ments,sq. ft.PrivateAllo-cationMonthlyFixedCostMonthlyVariableCostRentedAllo-cationMonthlyStorageCostMonthlyHandlingCostMonthlyCostJan.66,5001,979100%$ 22,500a$ 3,325b0%$ 0$ 0$ 25,825Feb.328,0009,76210022,50016,40038,900Mar.1,048,50031,20510022,50052,42574,925Apr.2,141,00063,72094c22,500100,627d64,282e8,992f136,401May2,820,00083,9297122,500100,1102927,26057,246207,116June2,395,00071,2808422,500100,5901612,77326,824162,687July1,303,00038,78010022,50065,15087,650Aug.460,90013,71710022,50023,04545,545Sept.99,9002,97310022,5004,99527,495Oct.15,30045510022,50076523,265Nov.302,2008,99410022,50015,11037,610Dec.556,70016,56810022,50027,83550,335Totals11,537,000$270,000$510,377$44,315$93,062$917,754a[90,000 + (3 ×60,000)]/12 = $22,500.b66,500 ×0.05 = $3,325.c60,000/63,720 = 0.94.d2,141,000 ×0.94 ×0.05 = $100,627.eGiven a monthly turnover ratio of 3 and 6% of the demand through the rented warehouse, then [(2,141,000 ×0.06)/3] ×0.1 = $4,282....
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This note was uploaded on 11/04/2010 for the course OPR 040 taught by Professor Ballau during the Spring '10 term at E. Kentucky.

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BALLOU12 - 12-1Storage and Handling DecisionsChapter...

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