Question 7.4. Consider a fast-pick area where cases are picked from pallets (and

Question

Question 7.4. Consider a fast-pick area where cases are picked from pallets (and all full-pallet picks are from reserve storage and may be ignored). Storing a SKU in the fast-pick area realizes a savings of I minute per pick; but each restock requires about 3 minutes. Because of volatility of purchasing, management is unable to specify a reasonable upper bound on how many pallets of each SKU may be expected in the warehouse. Which of the following SKUs has greatest claim to storage in the fast-pick area SKU Case picks Demand (pallets) 20 100 600 1000 200 (Answer: SKU B) Question 7.5. Answer the previous question with the following, additional information that tells when to trigger replenishment of the fast-pick area. Demand Reorder point (pallets) SKU Case picks (pallets) 20 100 1000 200 How many pallet locations could these SKUs usefully occupy in the forward pick area?

Explanation / Answer

7.4

Based on the maximum net time saved, we select SKU B for the fast-track area.

7.5

Based on the maximum bang-for-buck (= net time saved / ROP), we select SKU A for the forward pick area.

SKUs Case picks Time saved
(min) Demand
(pallets) Time loss (min) Net time saved (min) A 600 600 20 60 540 B 1000 1000 100 300 700 C 200 200 2 6 194

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