HOW TO MEASURE WAREHOUSE PERFORMANCE

Consider a warehouse with the following performance characteristics… • 58 operators paid an average of $40,000 per year • 175,000 square feet with an occupancy cost of $12.50 per square foot per year What is the total annual labor cost? What is the total annual occupancy cost? If the warehouse ships 4,289 orders per year, what is the total annual labor and occupancy cost per order?

Total Warehousing Cost Computation Exercise