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LOGM 4225 CUNY Brooklyn College Warehouse and Distribution Science PPT

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A distribution center stores all product on pallets. Currently, the warehouse stores SKUs at any location with available space. However, the management is considering to change the storage policy in order to minimize the costs associated with picking. The management wants to rearrange the warehouse based on the frequency of SKU picks.

The warehouse has 7500 pallet storage locations arranged in 5-pallet high pallet racks with lane depth of 1 pallet. The picking policy can be changed into a fast-pick area and a reserve area (bulk storage). The ground level of each rack can be considered as the fast-pick area and the upper rack positions can be considered as the bulk storage area. There are 1500 ground level pallet locations and all or some of the ground level pallet locations can be considered as fast-pick area.

All pallets are of identical dimensions; but different SKU’s may have different numbers of cartons per pallet.

The attached Excel file gives a list of the SKU’s in the warehouse and something about their activity. Each row corresponds to one SKU and the columns correspond to the following fields:

  • SKU ID
  • Average # piece picks
  • Average quantity (in pallets) sold as cartons per week
  • Average quantity (in pallets) sold as full-pallets per week
  • The minimum # pallets to be stored in the fast-pick area (if any at all)
  • The maximum number of pallets expected to be on-hand at any time

If the average quantity sold as cartons is 0, that SKU is not considered for fast-pick area.

A trial run using the forward-pick and bulk storage was used to calculate the labor requirements for the new storage method. The labor savings for picking a carton from the fast-pick area instead of the reserve varies between 0.75 minutes and 1.5 minutes with an average of 1 minute per forward pick (for less-than-pallet quantities). Restocking a pallet from bulk storage to the fast pick area varies between 2.5 minutes and 3.5 minutes with an average of 3 minutes per restock.

If a SKU is stored partly in the fast-pick area and partly in bulk storage, then all of its carton picks must come from the fast-pick area and all of its full-pallet picks must come from the bulk storage area.

One minute of labor saving per pallet position can be converted into $0.45. On the other hand, to train the picking staff on the new picking strategy, it is estimated to cost $25,000 per year.

Objectives

  • Discuss the issues with the current storage policy.
  • Identify the SKUs that should be stored in the fast-pick area) and the quantity (in pallets). You may use the pallet-slotting software for the analysis.
  • Calculate the labor requirements for the storage plan and labor savings compared to current plan.
  • Perform a sensitivity analysis for the range of time savings and fast-pick area limit range.
  • Perform a cost analysis and discuss the advantages or disadvantages of the new policy.

Deliverables

  • A project report. This report should contain at least 4pages excluding appendix and references. The format of the report is as follows:
  • A presentation (Less than 15 minutes) to present your findings and proposals

Font- (Body text- Times New Roman 12, Titles- Times New Roman 14)

Abstract

The abstract is a short paragraph with 100 – 200 words. Typically it contains the following information:

  • The objective of the work; a short summary of the problem
  • A short description of the methodology used
  • Summary of the findings

Section 1-Introduction

The Introduction includes the following information:

  • The objectives and scope of the investigation
  • Introduction to the project which discusses current storage policy
  • A description of the structure of the report that allows the reader to know what to expect

Section 2-Methodolgy

This section should include followings:

  • Methodology of selecting SKUs for fast-pick area (Explain the mathematical background of the analysis)
  • Any assumptions made for analysis
  • Data analysis methods/ tools used
  • Summary of results (% of SKUs in each area, % of labor cost for picking from each area, total labor requirements, labor savings). Provide the SKUs to be stored in fast-pick area and quantity in appendix.
  • Sensitivity analysis:
    • How cumulative labor savings varies when the per-pick labor savings time change
    • How cumulative labor savings varies when the restock time change
    • How cumulative labor savings varies when the size of the fast pick area change
    • Total cost per year in each scenario

Section 3-Results

This section should include followings:

Section 4: Conclusions & Recommendations

The Conclusions and Recommendations section closes the report. The information included in this section is:

  • A summary of the problem and the objective of the investigation
  • A brief description of results
  • How does your answer compare to the alternative of storing everything in bulk storage so the fast-pick area can be absorbed by manufacturing? Would it cost more or less to adopt the new picking policy?
  • If the new picking policy is recommended, what is the fast pick area size recommended?
  • Discussion of limitations of the study and what might affect the recommendation

References

This section includes professional citations of books, articles, websites, etc. that were used during the investigation. References should be numbered. References should be cited in the report.

Appendixes

The appendix starts in a different page.The appendix might include:

  • Tables
  • Charts that support decision making
  • Any other information that support the report.

All information included in the appendix section needs to be referenced in the report. Each appendix should have a title and an appendix number.

Teams

This project will be a team exercise. You have to collaborate with two classmates during the project. You are free to choose partners for the project. Your individual contribution will be considered when the grade is calculated.

Selecting Data File:

In the attached Excel file “SKUs.xlsx”, there are six worksheets. You must use the data in the worksheet which corresponds to your team number. For example, if your team number is 3, use the data in “skus3” worksheet.

Project Progress

You need to update the progress of your project to the instructor at least 2 weeks prior to the due date. Please set-up a meeting time to discuss the progress and get information or guidance, if required.

Grading

The grade for the project will contribute towards 20% of your final grade. The grade will be determined by:

  • The quality of the report: The report should include all the topics included in the deliverables. You have to convince me that you have done a thorough analysis and considered alternative solutions. Also, you have to show that you have chosen the best alternative action as the solution. (50%)
  • Structure of the report: The report should follow a scientific paper layout (i.e. introduction, background, discussing the problem, discussing the methods (for solving problems), and discussing the solution, and conclusion. If you use any sources, cite them using a standard citing method. (10%)
  • Presentation: Your presentation should be professional and present the findings within the time limit. Also, you should be able to answer the questions by audience and/or the instructor. (20%)
  • Team work: Your individual contribution to the project will be assessed by your partner. (20%)

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