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Inventory Policy Decisions and WH Operational Costs Project # UA10-MDLN

Inventory Policy Decisions and WH Operational Costs Project # UA10-MDLN. Sponsor Logo. Project Team Principal Investigator Dr. Russell D. Meller Graduate Assistant Luke F. Holt. Project Motivation

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Inventory Policy Decisions and WH Operational Costs Project # UA10-MDLN

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  1. Inventory Policy Decisions and WH Operational Costs Project #UA10-MDLN Sponsor Logo Project Team Principal Investigator Dr. Russell D. Meller Graduate Assistant Luke F. Holt Project Motivation • Inventory levels are important considerations when purchasing larger-than-usual quantities. These decisions affect the size of a facility, and its operational costs. Approach • Study purchasing decisions & inventory impacts • Model WH operations • Quantify costs at activity Level The Effect of Purchasing Decisions on Inventory Facility size increases due to order quantity Goal: Affect decision making Improving Medline’s Bottom Line True Savings Associated with a Good Buy Research: Need to understand this relationship Analysis from 2009-2010 Medline Tool • Added pallet locations: 930 • Additional minutes/pallet: 5 • Total pallets/year: 85,095 • Annual increase in labor: $132,394 • Must save $72 per pallet The Effect of Inventory Levels on WH Operational Costs When the warehouse size changes, the travel distance for storage and retrieval changes as well. When picking from zone 20, the labor per pallet for storage and retrieval increases. Zone 20 (Reserve Area) Research: Need to quantify impact Zone 10 (Forward Area) Thanks to the following Medline representatives: Bill Abington, Paul Ancona, Dave Lathrop, Daniel Schwartz, Maureen Walz

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