Hiram Miller—a

In this case, the basic problem is that the current two HMOPD old warehouses cannot meet the company's development and inhibition of the cast a shadow over future sales growth. The Management needs to find a solution to question: either relocate or cut back service some classes of customers in the near future in this case.

There are some symptomatic problems of the basic problem in the case. The six-story, 80,000-sqaure-foot warehouse on Jefferson Street, which was built in early 1950’s, was one of the oldest offices supply dealerships in the U.S. There was no mechanized material handling equipment and weak floors. There are only six receiving and shipping docks. This small dock capacity, resulting in 8 to 10 trucks waiting in the street waiting for a regular on the street. Sometimes the company should pay for the police department free weekly shopping trip. Also the space capacity was constrained by the 9 to 12 feet ceiling, the upper bound of the. Restricted to a limited three elevators and spiral chute movement of merchandise.The 9 to 12 foot ceiling constrained the space capacity. The limited availability of three elevators and spiral chute confined the movement the merchandise. On the other hand, the Carpenter Street warehouse locates in an economically depressed area of town. It is a 70,000-square-foot, two-floors building which has very limited space to store all merchandise. The Carpenter Street warehouse had weak floor as six-story warehouse. Since this warehouse shed peeling paint, plaster and dirt onto workers, merchandise and floors below, its ceiling was much worse

The division general manager and other branch management personnel thought about the warehouse five years ago, so the current situation is there are many difficulties to relocate it. First, there are 5,500 line items or more picked each day. The top ten items were picked 15-25 tomes at the same time as the bottom 10 items were picked as infrequently as once every two months. The warehouse stocked more than 10,000 items, which varied tremendously in size, shape, and weight. Also, different items has different picking rate. Last, there was difference of order among different items. Less than 100 items accounted for 11% of the line on order. Less than 1,000 items accounted for 42% of the items ordered. This could result in those small items like pens or scotch tape got lost.

We, however, realized that there would be some new problems after evaluated the relocation of the warehouse. First of all, the high trucking rate which means inconvenient transportation would be a limited factor. Then, the new warehouse would be far from 9 retailers, and the largest concentration of business office. Also, the distance from customers and employees would be much further than the previous one. Last, the cost of new warehouse was really high at 60 dollars per square foot.

There are four alternative solutions to solve the basic problem. Based on the company’s