Vital Vitamins Project

Background information
Student will design a manufacturing, warehouse and distribution center using good material handling
practices. The project will require analysis and design of material flow from receiving through shipping,
selection of appropriate material handling equipment, and a detailed description of the operation. The final
designs will be graded using the Rubric posted in Canvas. Refer to the handouts for further Project
Description, Company Profile, Facility Description, and Operational Details.
Facts and data
Vital Vitamins has provided all the current inventory and sales data for this facility (see handouts). Also
provided is a diagram (see sheet labeled “Empty Facility Space”).
Additional cost data:
1. Capital budget = $2.8M
2. Cost to install dock door = $15,000 (includes dock leveler and labor); budget $200/year/door for
maintenance
3. Forklift avg. purchase cost = $25,000 (but need to have a maintenance plan)
4. Forklift avg. lease = $650/mo. (“wet lease”, includes maintenance)
5. Labor costs for full-time employees:
a. Lift Truck Operator = $15/hr.
b. Line operators = $13/hr. (need 4 operators for regular line; need 3 for high-speed line)
c. Dock Personnel = $16/hr.
d. Administrative Personnel (Clerks, Customer Service Reps) = $22 – 25/hr.
e. Temp Laborer (unskilled) =$11/hr.
Additional facts:
1. A “Production Unit” = bottles
2. A customer or store order “Pieces” = bottles
3. Finished Goods received from Consolidators are packaged 10 bottles per case/carton, palletized
4. Finished Goods received from Small Distributors are packaged 100 bottles per tote, palletized
5. Finished Goods from the production lines are placed in SKU-specific totes for storage
6. Finished Goods “range in pallets” = ignore; focus on # of SKUs and # of pallets required
(see reverse page)

Requirement
1. The individual student will submit (using PowerPoint) the design, selection of material handling
equipment, and a detailed description of the operation.
2. The individual student will include in their presentation a diagram of the warehouse design. Also
include a slide that details Key Performance Indicators.
3. The presentation must include answers to these key financial decisions
a. Overall size of the building (173,000 sqft. Or 215,000 sqft.)
b. The number of dock doors required
c. Whether to price ticket in the warehouse or stores
d. The number of manufacturing lines required, or updates required for existing lines
e. Storage and Handling equipment for purchase (or lease)
f. Staffing savings to justify equipment purchases (or lease)
4. The individual student must display/explain the Product Line output numbers to justify the decision on
whether to upgrade or buy the high-speed line. Include this on a separate production plan slide.

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