Reference no: EM133353557

Case Study: The Operations Manager at Fat-E has been looking for a new warehouse space to either expand into or consolidate all of Fat-E's requirements into one building. They have expanded into the adjacent units at their current location however there are no other units available in the foreseeable future. The layout includes a production area (that is going to require more future space), a set of offices (that will also require more space as they grow), and the warehouse where raw materials and finished goods products are stored. The warehouse layout
includes a traditional racking system that can store single pallets in three levels (on the ground, the first tier and then the second tier). The warehouse is setup with ten foot aisles to accommodate the use of forklifts loading and unloading the racking. The Operations Manager sees two possible alternatives - find one large warehouse that can accommodate all of the operations including production, warehousing and the office space. Or, alternatively, find a public warehouse that can take on the warehousing requirements and use the current space to expand production and the office space.
You have been asked to do a preliminary report on the logistical impacts of the two options. As the Director of Logistics - you've been asked to focus your analysis to logistics (transportation, warehousing, etc.).Specifically, you have been asked to:

Questions:

1. Describe the advantages and disadvantages of the two new warehousing options.

2. Discuss potential materials handling strategies for reducing the amount of space that the existing warehouse operation occupies within Fat-E's building.