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Each of the seven products the partners plan to sell will be stored in its own area. In the absence of any inventory analysis, they will keep only the amount of
inventory that will fit into each storage area, regardless of differing levels of sales and different product size (space) requirements.
By establishing dedicated product-storage areas, the three partners hope to
1. Systematize order storing and picking
2. Reduce damage and spoilage
3. Facilitate inventory checking.
An important fourth goal, which to this point the partners have ignored, is reducing the materials handling requirements. By assigning the seven products to certain
storage areas, they can increase or decrease the materials handling requirements.
The following chart shows the estimated monthly sales of the seven products.
Product
Sales
Kegs
Cans (six-packs)
341
1,421
Cans (twelvepacks)
277
Lite (cans)
148
Bottles (sixpacks)
137
Bottles (other)
97
Quarts
76
DISCUSSION QUESTIONS
1. Which product should be stored in which storage area?
2. Now suppose that the three partners decide to make the number of trips to each area from the loading dock, not sales, the measure for reducing materials
handling requirements. After all, each keg sold requires one trip, but as many as twelve six-packs can be carried in one trip-even more if bought by the case. As
a rule, different products are not picked up on the same trip into the warehouse.
The estimated monthly trips into the warehouse for each product follow.
Product
Sales
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Kegs
341
Cans (six-packs)
178
Cans (twelvepacks)
55
Lite (cans)
19
Bottles (sixpacks)
34
Bottles (other)
32
Quarts
25
3. On further thought, the partners realize that they have been very shortsighted. They have considered only the trips they make when unloading the trucks. One
of the partners suggests that they should minimize the amount of walking and carrying done when they prepare orders for customers. To get an idea of the
customer flow, they look at past records and make a table that shows the number of times that two items appear on the same sales slip.
Kegs
Cans (sixpacks)
Cans
(twelvepacks)
Lite (cans)
Bottles
(sixpacks)
Bottles
(other)
Quarts
421
98
351
162
130
99
265
88
25
54
8
1
(For example, on twelve of the sales slips, a person had ordered kegs and six-pack cans. Keep in mind that any of the sales slips with a keg and a six-pack of
cans could also have listed other items.)
Given this information, how should the warehouse be laid out?
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