When a pallet arrives at the receiving dock, it is driven by a forklift driver to a storage location, where it resides until requested by the customer. Then a forklift driver moves it to a trailer on the shipping dock.
The warehouse pays its fork lift drivers for person-hours but it bills its customers for two handles for each pallet (in/out); therefore the warehouse wants many handles/person-hour.
Because a forklift handles one pallet at a time, the variable labor cost it incurs can be estimated fairly accurately as the time it takes to drive a forklift from receiving to the storage location to shipping. (Differences in insertion/extraction times are generally small in comparison to differences in travel costs; therefore we treat insertion/extraction times as fixed costs, which may be ignored in deciding where to place SKUs.)
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