CONTENT

01 Wa r e h o u s e
Equipment and Cost 02 Wa r e h o u s e c o s t

03 Storage and
Handling 04 Handling Cost

Equipment
LEARNING OBJECTIVES
Handling and storage equipment are perfect
complement, the choice of each of them depends
on the selection of other.

Essential part of warehouse cost and investment.

Technology plays a vital role in the evolution of

warehouse optimal and efficient facilities.
The goal of storage and handling equipment is to
optimize, reduce lead time, and reduce cost. Thus,
proper selection must take into account the units to be
relocated, the available space, the processes and
functions that must be carried out, staff capabilities,
and budget.
There are two ways to manuever merchandise in
the warehouse.
1. Horizontal transport-it moves goods from one
side to another (Pallet from receiving area to
stroage area).
2. Vertical transport-moving from the floor to the
roof. (Pallets in a specific space of the rack
system).
HORIZONTAL VERTICAL
HORIZONTAL VERTICAL
Cost Concept
warehouse cost is 20-30% of the total
logistic’s cost’s and 20-25% more for inventory
Categories of Warehousing Costs
Basic Warehouse Tree
Sales and Marketing
IT STAFF 50%
Supervision Staff OPERATIONS HANDLING
EQUIPMENT 10%
Insurance
TOTAL COSTS
General Office Cost
GENERAL EXP STAFF 50%
Non-Operation Staff STORAGE
Bank Cgarges
Basic Warehouse Tree
PPE

STAFF 50% WAGES

WELFARE
HANDLING
MAINTENANCE

EQUIPMENT 10% EQUIPMENT

RENTAL
DEPRECIATION

RENT/LEASE
ELECTRICITY,GAS, WATER
STORAGE
BUILDING 40% BUILDING DEPRECIATION
CLEANING SERVICES
BUILDING REPAIRS AND
MAINTENANCE
ILLUSTRATION:
STORAGE COST
CUM Company is a
cloth diaper
company that wants
to know their total
storage cost. The
detailed activities
involved are as
follows:
Additional Information:
• Cost per labor hour is P16
• Cost for MHE is P25
• Overhead total expenses is P10,000
• Rack Amortization is P5,000
• Means of containment P2,500
• Rent Cost P45,000
20x16 25x5 15%of 10k sum of L,MHE OH
HANDLING COST
ILLUSTRATION:
HANDLING COST
General concept Description Amount budgeted/yr
Personnel 4 load/unload 85
operators
2 forklift drivers 52
2 picking operators 100
1 dispathc supervisor 28
one order preparation 30
supervisor
1 warehouse lead 48
Equipment Maintenance 5.60
Amortization 3
Overhead Administration 100
General expenses 3.2
Warehouse handling cost distributed by percentage
of on each activity
Warehouse handling cost distributed by percentage
of on each activity

Total HC input
i76.38+41.36=117.740

Total HC output
149.43+101.44+66.19=337.
06
IDENTIFY THE FOLLOWING COSTS

1. Salary of the equipment operator.

2. Cost of item occupying 15 SQM amounting to P10,000
3. Rent of the warehouse building.
4. Fire insurance of the building
5. Periodic Maintenance of the forklift.
END OF TOPIC 2
Thank You
Very Much