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Assignment 3. Warehouse Design

The document provides calculations to determine the optimal placement of a loading/unloading dock for a warehouse. Placing the dock near the corner of the warehouse results in dimensions of 451 feet by 867 feet and a total cost of $61,936,000. Placing the dock in the center results in dimensions of 632 feet by 632 feet and a total cost of $44,176,800. The cost difference between a corner dock versus a center dock is $17,759,200, making the center dock placement the more cost effective option.

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Prashant Srivastav
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230 views3 pages

Assignment 3. Warehouse Design

The document provides calculations to determine the optimal placement of a loading/unloading dock for a warehouse. Placing the dock near the corner of the warehouse results in dimensions of 451 feet by 867 feet and a total cost of $61,936,000. Placing the dock in the center results in dimensions of 632 feet by 632 feet and a total cost of $44,176,800. The cost difference between a corner dock versus a center dock is $17,759,200, making the center dock placement the more cost effective option.

Uploaded by

Prashant Srivastav
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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ASSIGNMENT 3

Warehouse In & Out Dock consideration


Question. Aman & Company operate spare parts warehouse has a monthly throughput of
1,50,000 parts and an average in and out materials handling cost of $.075 per foot per case
moved. Order picking requires a trip to and from the outbound dock for each item requested. The
total square footage needed for the operation is 4,00,000. Construction estimates shows that a
400 x 600 sq. ft. warehouse can be built for $ 75 per sq. ft. The effective warehouse life is 25
years. The loading/ unloading dock is to be calculated for the proposed building. Calculate the
estimates for
(a) loading/ unloading dock is to be located near to a corner of the proposed building?
(b) loading/ unloading dock is to be located near to the centre of the proposed building?
(c) The total relevant cost for both the cases when loading/ unloading dock is to be located
near to a corner and to the centre?
(d) What is the cost difference for both the cases mentioned in question(c)

SOLUTION:
Loading/ unloading dock is to be located near to a corner of the proposed
building (X):
K= 2(L+B)
= 2(400+600)
= 2000 sq. ft.
Cost of construction= 400000*$75
= 30000000
Annualizing the cost= 30000000/25
= 1200000
On a perimeter per feet cost= 1200000/2000

= 600ft K
C= holding cost (monthly throughput*12)
= $.075(150000*12)
= $135000/ft
W*= √(c+8k)/(2c+8k) √S
= √139800/274800 √400000
= 0.713255651*632.455532
= 451ft apx.
L*= S/W*
= 400000/451
= 867 ft apx.
TCx= 2√[((1/2)*c)+2k][((1/4)*c)+2k] √S
= 2√[((1/2)*135000)+2*600][((1/4)*135000)+2*600] √400000

TCx= $61,936,000

Loading/ unloading dock is to be located near to the centre of the proposed


building (Y):

W*= √S
= √400000
= 632 ft
L*= √S
= √400000
= 632 ft
TCy= [((1/2)*c) +4K] √S
= [((1/2)*135000) + 4*600] √400000
= 69900*632

= $44,176,800
TCx – TCy = $61,936,000 - $44,176,800

= $17,759,200
The cost of locating the loading/unloading dock near to the center is less in comparison to the
dock located near the corner. There is the total cost saving is of $17,759,200 if the dock will be
made at the center rather than making it at the corner.
Q1) Loading/ unloading dock is to be located near to a corner of the proposed building?
A1) W*= √(c+8k)/(2c+8k) √S
= √139800/274800 √400000
= 0.713255651*632.455532
= 451ft apx.
L*= S/W*
= 400000/451
= 867 ft apx.
Q2) Loading/ unloading dock is to be located near to the center of the proposed building?
A1) W*= √S
= √400000
= 632 ft
L*= √S
= √400000
= 632 ft
Q3) The total relevant cost for both the cases when loading/ unloading dock is to be located near
to a corner and to the center?
A3) TCx= 2√[((1/2)*c)+2k][((1/4)*c)+2k] √S
= 2√[((1/2)*135000)+2*600][((1/4)*135000)+2*600] √400000

TCx= $61,936,000
TCy= [((1/2)*c) +4K] √S
= [((1/2)*135000) + 4*600] √400000
= 69900*632

= $44,176,800
Q4) What is the cost difference for both the cases mentioned in above question?
A4) TCx – TCy = $61,936,000 - $44,176,800

= $17,759,200

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