Distribution Example

Case Study #1-Distribution Center
A retailer wishes to select a location for a 500,000 square foot distribution center employing 350. The equipment investment is $15,000,000, and annual electricity consumption is projected at 6.1 million kilowatt hours.

The facility must be close to an intermodal terminal with service from a west coast port. It has large seasonal employment requirements, and the retailer wants to avoid any locations where the United Food and Commercial Workers (UFCW) union has been active or has organized any employers. The preferred location is in the Midwest.

The map at right shows the intermodal terminals that satisfy the client’s service requirements. All elections involving the UFCW, as well as companies that are or have been organized by the UFCW, are also shown. (Click map to enlarge.)

The second map summarizes the results of the analysis. It shows the intermodal terminals, as well as all counties within 60 miles of these terminals in which the UFCW has had no elections since 1990, and in which there are no companies organized by the union.

The retailer’s annual operating costs have been projected, taking into account county-level differentials in wage rates for order pickers, facility development costs, real and personal property tax rates, and electricity cost. The annual cost savings are in excess of $2,000,000 in the lowest cost locations.

Finally, the lowest cost locations that offer the best labor availability to meet the retailer’s seasonal employment needs are highlighted.