【正文】 duct’s inventory level fluctuation. Based on its variance, each product was assigned an extra percentage — ranging from 3 percent to 15 percent— of the total inventory required for peak season. The selected execution method for implementing a FIFO system was to allow extra space for product rotation. Product was to be pulled for customer shipments from one end and stored from supplier shipments at the other end. This required the product to be rotated within its assigned space. To facilitate the product rotation, an extra 5 percent (based on the space required for peak inventory) was allowed. With the help of the warehouse manager, stacking rules for each product category were determined, which would later bee a guideline for how many of each product could be stacked without incurring damage. The main criteria for the stacking rules were product weight and height. When space is scarce, there are other techniques that could be applied to reduce space requirements at the expense of some handling. Combining product groups by their seasonality is one of them. If, for example, a particular category’s seasonality is offset from another by a given period of time, it would be wise to put each category next to each other and reduce the overall space required to handle peak season. Scenarios and tradeoff analyses were developed after priorities were established and space allocated. A warehouse draft layout was created to visualize the results of the analysis and develop the alternate scenarios. This draft included all relevant product information (rate of sale, physical parameters, stacking r ules, etc.) for understanding and handling ease. The warehouse manager and staff brought qualitative information to the decisionmaking process. An alternate scenario was developed to optimize the solution even further. Based on current business projections and anticipated product mix changes, the team increased the longrun potential savings. Implementation phase. A plete layout — including product positioning, space breakdown (baseline, FIFO, and overflow space), and quality control and staging areas — was developed and shared with the people involved. Safety and environmental personnel were asked to help develop escape routes and any other protection measures. The next part of the implementation phase was to develop operating procedures with the customer in mind. The three main issues addressed were training, exception charges, and pickups by appointment. Employees were trained on how to care for the product. Implementation took place in phases. Based on ining container schedules, ining product was mainly stored at the new location, while shipments took place out of the satellite warehouses. Within two months, most satellite warehouses were closed, and all the shipping and receiving operations were moved to the new 800,000squarefoot warehouse. Results Within three months, the pany began seeing benefits. The results over the two years since the implementation. The total warehouse space was reduced by 28 percent, which directly affected the amount of rent paid. In fact, the rent savings were around 36 percent. Operationsrelated exception charges were decreased. The new warehouse had enough capacity to sustain the peak inventory situation that would have previously caused product overflow and, therefore, demurrage charges. The newly implemented pickup appointment system eliminated per diem charges. Labor efficiency improvements were achieved by eliminating unnecessary steps while handling the product in receiving and shipping. Excess internal transfers of product for consolidation also played a mayor role in reducing operating expenses.