Cost of Pallet Assembly in a Warehouse Your warehouse has been asked to bid on a job to assemble 1000 pallets of kits for shipment to an operating unit. There are four kinds of kits, and each pallet for shipment has 5 layers, or tiers, of 8 kits each. The shipping pallet consists of one layer each of kit types 1, 3, and 4, and 2 layers of kit type 2. The individual kits are in stock and stored on dedicated pallets. Kit types 1 and 2 are stored on pallets with 40 kits per pallet, kit 3 has 48 kits per pallet, and kit 4 is stored on pallets of 32 kits each. The process of assembling the final pallets consists of the following: Set up dedicated base pallets to serve as source for final pallet. (productivity = 25 pallets per hour, regardless of kit type) Transfer appropriate number of type 1 kits to shipping pallet Transfer appropriate number of type 2 kits to shipping pallet Transfer appropriate number of type 3 kits to shipping pallet Transfer appropriate number of type 4 kits to shipping pallet (productivity for steps 2-5 is 200 kits per hour) 4 Apply ID tags to each pallet (productivity-300 pallets per hour) 7Stretchwrap each pallet (productivity 50 pallets per hour) Stack finished pallets (productivity-25 pallets per hour) Load pallets on trucks (productivity- 25 pallets per hour) The annual operating costs for the warehouse are on the next page. Assign each of the steps to one of the general activities done in the warehouse, per slide 9-7. Describe which of the individual activities under each general activity might apply here Indicate which of the WMS functions on slide 9-17 is relevant to this project. Compute the hours for each step of the project. Determine the cost per hour for this project. How much would you bid for the job? Why?
Layer one- type one kit- 8 kits per layer- 8000 total type one required
Layer two and three- type two kit- 8 kits per layerx 2 layers=16000 total type two required
Layer four- type four kit- 8 kits per layer- 8000 total type four required
Layer five- type five kit- 8 kits per layer- 8000 total type five required
1000 mixed pallets requires
8000 type 1 kits = 8000/40 kits per pallet=200 type 1 pallets
16000 type 2 kits = 16000/40 kits per pallet =400 type 2 pallets
8000 type 3 kits = 8000 kits/48 kits per pallet =167 type 3 pallets
8000 type 4 kits = 8000 kits/ 32 kits per pallet= 250 type 4 pallets
Total Setup Pallets = 1017 pallets
1017 pallets / 25 hours per pallet =requiring 41 hours
1000 pallets to shp with 40 kits per pallet = 40,000 total kits
Transfer: 40,000 kits @ 200 kits per hour =200 hours
ID Tags: 1000 pallets @ 300 pallets per hour = 3.3 hours
Stretchwrap: 1000 pallets @ 50 pallets per hour = 20 hours
Stack: 1000 pallets @ 25 pallets per hour = 40 hours
Load: 1000 pallets @25 pallets per hour = 40 hours
Total Hours = 344
$ (see below) = 344*$112.43 = $38675 + profit
Profit at 20%----$38675 * 1.2 =$46410 total charged
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