journal article
LitStream Collection
Private Warehouse Cost Dynamics
1991 International Journal of Physical Distribution & Logistics Management
doi: 10.1108/09600039110007635
The results of an empirical study which has investigated the costdynamics of a group of private warehouses is presented. Specifically thearticle tests the applicability of using a learning curve to plan andevaluate a private warehouses average labour cost per case performance.To test the applicability of using a learning curve in this industry,the study has analysed the empirical performance of a small sample ofprivate warehouses over a fiveyear period. A regression model of theprivate warehouses average labour cost per case performance shows thatthey do follow the standard loglinear learning curve relationshipbetween unit cost and cumulative units. The regression model shows thatthe private warehouses have a learning rate of 87 per cent. An exampleapplication shows that including the studys results in aprivateversuspublic warehouse selection problem, using a discountedcashflow analysis, increases the private warehouses internal rate ofreturn by approximately 10 per cent.