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 The objective of a warehouse layout is to find out the best trade-off between handling cost and costs associated with warehouse space. Consequently, managements task is to maximize the utilization of the total “cube” of the warehouse, where that cab utilize its full volume while maintaining low material handling costs. Material handling costs can be defined as, all the costs related to the transaction.

This consists of incoming transport, storage and outgoing transport of the materials to be warehoused. These costs include equipment, people, material, supervision, insurance and depreciation. Effective warehouse layouts also minimize the damage and spoilage of material within the warehouse.

Management minimizes the sum of the resources spent on finding and moving material plus the deterioration and damage to the material itself. The variety of items stored and the number of items ‘picked’ has direct bearing on the optimum layout. A warehouse storing a few unique items lends itself to higher density than a warehouse storing a variety of items. Modern ware house management is, in many instances, an automated procedure using automated storage and retrieval systems.

An important component of warehouse layout is the relationship between the receiving/unloading area and the shipping/loading area. Facility design depends on the type of supplies unloaded, when they are unloaded from (trucks, rail cars, barges etc, where they are unloaded. In some companies, the receiving and shipping facilities or docks as they are called are even the same area, sometimes they are receiving docks in the morning and shipping docks in the afternoon.

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