You may not use a calculator on this exam. You are allowed one index card of notes, 3 inches by 5 inches.

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1 ISyE 6335, Quiz 4, November 28, 2016 Time Limit: 45 Minutes Name: This exam contains 8 pages (including this cover page) and 7 problems. Check to see if any pages are missing. Enter all requested information on the top of this page, and put your initials on the top of every page, in case the pages become separated. You may not use a calculator on this exam. You are allowed one index card of notes, 3 inches by 5 inches. To receive credit, your work must be justified, legible, comprehensible and your own. signing your name above you agree to abide by the Georgia Tech honor code. By If you need more space, use the back of the pages; clearly indicate when you have done this. Do not write in the table below. Question: Total Points: Score:

2 ISyE 6335 Quiz 4 - Page 2 of 8 November 28, (20 points) (a) (5 points) Identify the factor most responsible for travel in the warehouse. Annual sales of each SKU The popularity of each SKU The value of each SKU The dollar-volume of each SKU A FIFO inventory policy The number of turns of each SKU None of the above Solution: SKU popularity because each request is likely to result a visit to the storage location (b) (5 points) What are the dimensions of the most common standard pallet? Of the most common standard case? Solution: Pallet: 1 meter by 1.2 meters; or the nearly equivalent 40 inches by 48 inches Case: There are no standard dimensions for a case! (c) (5 points) Name two advantages of flow rack over shelving. Solution: Greater density of SKUs on the pick-face so more efficient picking Holds more of each SKU so less frequent need for restock Can be restocked during picking without disruption (d) (5 points) What information does this SQL query return? CREATE TABLE MyTable AS (SELECT S a l e s. SkuID, Count( S a l e s. SkuID ) AS M y S t a t i s t i c FROM S a l e s GROUP BY S a l e s. SkuID ORDER BY M y S t a t i s t i c DESC) WITH DATA; Solution: A list of SKUs, sorted from most popular to least, and the number of times each was requested

3 ISyE 6335 Quiz 4 - Page 3 of 8 November 28, (15 points) A finished goods warehouse turns its inventory of SKU A 6 times a year. The average inventory over the year is 1,000 pallets. (a) (5 points) About how many pallets are shipped per month? Solution: Inventory turns once every 2 months, so by Little s Law: λ = 1000 pallets/2 months = 500pallets/month. (b) (5 points) About how much space will be required to hold SKU A when it is at its maximum inventory level? Solution: To average 1,000 pallets, the maximum inventory must be 2,000 pallets. (c) (5 points) What is the longest time that any of the pallets of SKU A is expected to be in the warehouse? Solution: 2000 pallets/ (500 pallets/month) = 4 months.

4 ISyE 6335 Quiz 4 - Page 4 of 8 November 28, 2016 Figure 1: A unit-load warehouse in which receiving is at the top-left corner and shipping is at the bottom-right 3. (15 points) Unit-load warehouse (a) (5 points) Where are the most convenient storage locations in the warehouse of Figure 1? (You may mark them on the Figure.) Explain your answer. Solution: All the storage locations are of equal convenience because the total distance from receiving to the location to shipping are identical. (b) (5 points) When are cross aisles most likely to be useful in a unit-load warehouse? Solution: When there is travel from storage location to storage location, such as when using dual-cycle (c) (5 points) Choose the best answer to the following: In the unit-load warehouse, priority for convenient storage should go to which skus? Ordered most frequently? Ordered in greatest quantity? Ordered in greatest physical volume? Most turns? Most single-line orders? Most expensive? It is unfair to single out some SKUs for special treatment. None of the above Solution: Most turns

5 ISyE 6335 Quiz 4 - Page 5 of 8 November 28, (15 points) (a) (5 points) When pallets are stored in a deep lane, some space is rendered unable for storage for either of two reasons. What are they? Solution: Space is lost due to: need to provide accessibility (aisle space in front of the lane); and honeycombing (space that is emptied by product movement but unavailable because storage space within the aisle is reserved). (b) (10 points) Suppose that new pallets of product have just arrived to a DC that holds product in 1-deep pallet rack in which all openings are of the same dimensions. Unfortunately, all pallet locations are fully occupied. But to make room for the new product, some pallets could be broken down into cases and moved to shelving. Which is the best choice to be moved to shelving? Choose the best answer and explain your reasoning. The pallet that is emptying most quickly The pallet that is emptying most slowly The pallet that is expected to run out soonest The pallet that is expected to last longest The pallet whose cartons would occupy the least volume in the shelving. Solution: The pallet whose cartons would occupy the least volume. This creates a pallet opening at least cost.

6 ISyE 6335 Quiz 4 - Page 6 of 8 November 28, (10 points) Consider an e-commerce fulfillment center that picks pieces from a forward area stocked to minimize total labor. What is the likely effect on the net benefit of a forward pick area if the company were to... (a) (5 points) Double their customer base by adding new customers whose ordering is very much like current customers? (Explain your answer.) Solution: It will increase both picks and physical volume sold. If these are in about the same proportion as for current customers, then the bang-for-buck of each SKU will increase and so will the value of the forward pick area. (b) (5 points) Convince current customers to continue their regular purchases but to buy in greater quantity? (Explain your answer.) Solution: The increase in quantity will increase the required number of restocks but without necessarily increasing the picks. Therefore the bang-for-buck of each SKU may be expected to decrease and so will the value of the forward-pick area.

7 ISyE 6335 Quiz 4 - Page 7 of 8 November 28, (15 points) High-volume order-picking (a) (5 points) To maximize the production rate under zone picking, where should the fastest worker be stationed? Explain your answer. Solution: The rate of production will be determined by the bottleneck station and will be independent of the sequence of workers. (b) (5 points) What are the two signs pointing to a bottleneck in a zone-picking operation? Solution: Work-in-process upstream of the bottleneck and idle workers downstream. (c) (5 points) Under walk-and-pick order-picking, sometimes one worker will catch up to and be blocked by another. What is the cost of allowing the blocked worker to pass the worker in front. Solution: The sequence of order completions will be different from the sequence of order releases, which may mean the completed orders have to be sorted before loading. Extra space is necessary to allow one worker to pass another. Provision must be made to allow the passing worker to move his/her work-inprocess.

8 ISyE 6335 Quiz 4 - Page 8 of 8 November 28, (10 points) Inventory accuracy (a) (5 points) List three costs of inventory inaccuracy. Solution: Increased levels of safety stock Increased stockouts and so reduced level of customer service Decreased return on investment in ERP, WMS software (b) (5 points) If you must cycle-count a SKU earlier than necessary, which SKU should it be, and why? Solution: The one with the least daily sales, so that the additional work of counting will be as little as possible.