There is no one type of pallet rack which best suits all applications. Cost plays a major role in deciding what rack to use. This computer racking cost comparison model was developed to quantify the total cost differences between racking types.

The model calculates the theoretical expected annual storage and handling cost per unit for different storage options. It takes the capital and running cost of the building, material handling equipment, retrieval and storage actions and racking into account. The different options which are currently compared are: block stacking, drive-in racking, standard racking, narrow aisle racking, push back racking and mobile racking. The model can however be easily extended to incorporate other racking types.

The idea behind the model is to give the user the opportunity to "play" with different storage heights, bay lengths and aisle widths and to compare the cost and space results between the options. The model also gives the user the opportunity to see the effect that degree of accessibility to pallets has on cost.

The cost inputs do not necessarily have to be extremely accurate. One tests the cost sensitivity by for instance looking at what effect it would have if a cost item were to increase by say 10%. The strength of a model such as this lies in the speed at which one can look at the cost effect of various options.


HOW DOES THE MODEL WORK?

The model has been designed to accommodate as many variables as possible so that the user can really play around with all the different options as mentioned above.

The first section is called "What is being stored?"
Here the user decides how many pallets he/she wants to store. Other information about the pallet such as height and weight is also required. This section also sets out the working hours and the number of pallet rotations that take place in a year.



In the second section the different variables used for the cost calculations are set. These are variables regarding the capital costs, the material handling equipment and running costs. In this section the user is also required to give information regarding utilisation. Note that the default values are used if information is not given in blue



The third section is where the different racking and stacking options (eg. block stacking, drive-in racking, etc.) costs are calculated using the information from section one and two.

For each of the racking options as mentioned above the following is calculated:

- The building size required to accommodate the number of storage spaces specified earlier in the model.

There are two layout options for each, one with one aisle and another with two aisles. The model indicates that two aisles should rather be used for building calculations when the length to width relation (or vice versa) is more than 2. The building size is influenced by the user's decisions regarding bay and row depth as well as aisle widths.

- The number of luminaires required.

- The number of forklift trucks, reach trucks or narrow aisle trucks required to perform the storage and retrieval actions as specified in section 1. It also decides which truck to use based on the aisle widths specified.

- Calculation of the racking cost

- The capital cost and fixed cost is calculated based on the building size, number of trucks and racking system.

- The running cost is calculated based on the number of hours worked and number of trucks as well electricity cost for mobile racking and lighting.

The end result for all racking options give the annual storage and handling cost per pallet which is calculated from adding the annual fixed cost and running cost and dividing it with the number of pallets stored during the year. A table gives a summary of your choices and the comparative end results.

At our recent seminar, delegates were given the opportunity to use the model. They jointly decided to compare a warehouse where:

4000 pallets needed to be stored.
Each pallet is 1,5 m high and weighs 1,2 ton.
Pallets to be stored 4 high.
Storage is longer term with an average of 9 pallet rotations per year.
Block stacking rows are 15 pallets deep.
Drive-in racking bays are 6 pallets deep.
Standard and narrow-aisle racking rows are 15 pallets long.
Push-back racking bays are 5 pallets deep.
Mobiles are 30 pallets long.

The result is as depicted in the following table and graphs.

 

STORAGE COST COMPARISON MODEL :

RACKING,BUILDING AND HANDLING METHODS

Your choice of storage requirements was:

Number of pallets to be stored

4000

The weight of a pallet

1.2

ton

The number of layers high

4

Number of pallet rotations in a year

9

Block

Drive-in

Standard

Narrow-aisle

Push-back

Mobile

Stacking

Racking

Racking

Racking

Racking

Racking

Utilisation factor

0.6

0.7

1.00

1.00

0.8

1.00

Building area (m2)

2986.2

3226.1

5385.6

3264.0

2250.0

2084.5

Capital cost per pallet storage position

R 1,079

R 1,441

R 2,104

R 1,400

R 1,687

R 1,930

Annual storage and handling cost per pallet stored

R 23

R 33

R 43

R 32

R 46

R 52

 

 


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