Question 2.1. What are the five typical physical units-of-measure in which product is handled in a warehouse? For each unit-of-measure, state whether there are any standardized dimensions and, if so, identify them.

Question 2.2. In what ways has the inventory process depicted in Figure 2.5 been idealized?

Question 2.3. What are the advantages and disadvantages of dedicated (reserved) storage? Of shared (random) storage?

Question 2.4. Why is random storage (shared storage) likely to generate more space efficiency in a pallet storage area than where cartons are stored directly on shelves?

Question 2.5. Consider a SKU that has been allocated more than one location within
a warehouse that is organized by “shared storage”.

• What are the advantages/disadvantages of allowing picking from any or all of the locations?
• What are the advantages/disadvantages of restricting picking to only one of those locations (until empty, when another location would be designated the one from which to pick)?

Question 2.6. In real life a certain amount of safety stock may be held in a storage location to guard against stockout while awaiting replenishment to that location (which would interrupt order-picking). How would this affect the average utilization of storage space?

Question 2.7 (Harder). What value of space utilization would you expect to observe if you     showed up at random to examine storage at a warehouse using shared storage?For simplicity, consider a single SKU that is stored in k locations of identical size. Assume an idealized inventory process such as depicted in Figure 2.5 and assume that all picks are directed to the location that is most nearly empty.
    Prove that the expected space utilization under the model above (random sampling) is never greater than the mean space utilization.
    Where is the difference in the mean and expected mean values greatest? Explain how this difference arises.

Question 2.8. Your third-party warehouse has space available for 10,000 pallets and you have 20 forklift operators per 8-hour day for 250 working days a year. If the average trip from receiving to storage to shipping is 10 minutes, how many inventory turns a year could you support for a full warehouse? (Answer: 24 turns per year).

Question 2.9. Your third-party warehouse is bidding for a contract to store widgets as they are manufactured. However, widgets are perishable and have a shelf life of 30 days. The manufacturer produces at an average rate of 20 pallets per day. Suggest an upper bound on the number of pallet positions reserved for widgets. (Answer: 600 pallet positions)

Question 2.10. A pallet storage facility holds about 10,000 pallets in storage. Arrivals and departures are handled by 7 forklift operators and the average forklift travel time from receiving to a storage location and then to shipping is about 6 minutes. Estimate the inventory turns per year. Assume each driver works 8 hours per day for 250 days of the year.

Question 2.11. Suppose a dairy distributor, experiencing approximately constant demand for each SKU, ships an average of 200 pallets per day. If, on average, there are approximately 1,000 occupied pallet positions, how long must the shelf life of its product be to avoid spoilage? (Answer: 10 days)