Consider three pallet locations A, B, C, for which the total tme to travel from receiving to the location to shipping is 1, 2 and 2 minutes, respectively. Through these locations flow two SKUs, x and y, which you must manage in a strict FIFO manner. Every three days one pallet of SKU x is shipped out in the morning and one pallet arrives in the afternoon and is put away. Every two days one pallet of SKU y is shipped out in the morning and one pallet arrives and is put away. You maintain a constant inventory of one pallet of SKU x and two pallets of SKU y on-hand at all times.
A. If you are using a policy of dedicated storage, what is the assignment of SKUs to storage locations that minimizes average labor? (Justify your answer) What is the corresponding average minutes per day spent moving these products?
B. What is the smallest sustainable value of average minutes per day spent moving these SKUs if you adopt a policy of random storage? Does it make any difference where the SKUs are stored initially?
C. What is the best way of assigning pallets to storage locations if you are permitted to drop the FIFO requirement? Would this save any labor? If so, how much; if not, why not? D. How would your previous answers change if the pallets of SKU y arrive in batches of two every four days? Assume the pattern of shipping is unchanged.