| Course | OPM-4150 Logistics |
|---|---|
| Module | Module 3 |
| Paper type | Module 3 written assignment: warehousing and information systems |
| Length | About 588 words, 5 pages |
| Format | APA 7 student paper |
| School | Thomas Edison State University |
| Program | B.S.B.A. in Operations Management |
| Updated | October 2026 |
Free sample paper for OPM 4150 Module 3
Rent First, Build Later: Breakeven Analysis for a Second Warehouse
Student Name
B.S.B.A. in Operations Management, Thomas Edison State University
OPM-4150: Logistics
Mentor Name
Month Day, Year
Rent First, Build Later: Breakeven Analysis for a Second Warehouse
The Options
Gourdin (2006) distinguishes public warehouses, which charge for space and handling as used; contract warehouses, which provide dedicated services under a longer agreement; and private warehouses, owned or leased and run by the firm. Public warehousing turns a fixed cost into a variable one and preserves flexibility. Private warehousing gives control and is cheaper per unit at high, steady volumes. Coyle et al. (2017) add that contract warehousing sits between the two, offering dedicated space and services without the capital commitment of ownership.
Breakeven Analysis
A public warehouse in Harrisburg quoted $2.10 per hundredweight (cwt) for storage and handling. A private warehouse would cost about $480,000 a year in lease, equipment and management, plus $0.80 per cwt in variable labor and supplies.
First-year volume through Harrisburg is forecast at 300,000 cwt, below breakeven, so public warehousing saves about $90,000. If volume grows 20 percent a year as planned, it reaches about 420,000 cwt in year three, where a private warehouse would save about $66,000 a year.
| Item | Calculation | Result |
|---|---|---|
| Breakeven volume | $480,000 / ($2.10 minus $0.80) | about 369,000 cwt |
| Cost at 300,000 cwt, public | 300,000 x $2.10 | $630,000 |
| Cost at 300,000 cwt, private | $480,000 + 300,000 x $0.80 | $720,000 |
| Cost at 420,000 cwt, public | 420,000 x $2.10 | $882,000 |
| Cost at 420,000 cwt, private | $480,000 + 420,000 x $0.80 | $816,000 |
Recommendation on Warehousing
Start with a public warehouse on a two-year agreement. That avoids a fixed commitment while the market in central Pennsylvania is proven, and it lets the distributor learn the site's volume and order profile before designing its own building. Revisit the decision when volume passes about 350,000 cwt, leaving time to lease and equip a private site before breakeven.
Information Systems
Warehouses run on information. Gourdin notes that information systems coordinate orders, inventory and movement across the logistics system. Our Paulsboro warehouse still picks from paper lists, and its picking error rate is 1.2 percent of lines, which means about 300 wrong or missing items a week reach restaurants. The errors are costly: each mis-pick triggers a return trip or a credit, which our customer service team estimates at $38 on average, or about $590,000 a year. Against that, a cloud system and scanners for 40 pickers would cost about $180,000 to install and $45,000 a year to run.
Frazelle (2016) describes a warehouse management system as software that directs receiving, put-away, picking and shipping, and notes that bar code scanning at each step confirms that the right item and quantity are handled. With scanning, pickers scan each item, and the system rejects a wrong product before it leaves the shelf. Distributors that adopt scanning typically cut picking errors sharply.
Radio frequency identification reads tags without line of sight and can count whole pallets at once, but tags cost more than bar code labels, and most of our items are low-value disposables. Bar codes fit our products; RFID could be tested later on high-value equipment such as mixers and ovens.
Recommendation on Systems
Install a cloud-based warehouse management system with bar code scanning at Paulsboro first, then require the Harrisburg public warehouse to connect to it, or choose a provider whose system can share inventory data with ours daily. A target of 0.3 percent picking errors within six months is reasonable.
Conclusion
Breakeven analysis favors renting space in Harrisburg until volume passes about 369,000 cwt, and a warehouse management system with bar code scanning would cut the errors that cost us goodwill with restaurants.
References
Coyle, J. J., Langley, C. J., Novack, R. A., & Gibson, B. J. (2017). Supply chain management: A logistics perspective (10th ed.). Cengage Learning.
Frazelle, E. H. (2016). World-class warehousing and material handling (2nd ed.). McGraw-Hill Education.
Gourdin, K. N. (2006). Global logistics management: A competitive advantage for the 21st century (2nd ed.). Blackwell.
Reading the OPM 4150 Module 3 assignment instructions
This module's written assignments cover warehousing and information systems. Expect to compare public, contract and private warehousing, compute a breakeven volume and explain how information systems such as warehouse management systems, bar codes and RFID support warehouse operations. Show the breakeven calculation and costs on both sides of it, and tie the technology discussion to a specific problem, such as picking errors, rather than describing the systems in general. Quantify the problem an information system would solve, such as the cost of picking errors, and compare it with the system's cost. Name the volume at which you would reopen the warehousing decision. Keep the formula and figures in one table.
How this OPM 4150 Module 3 example is built
The paper defines the three warehousing options. A table computes the breakeven volume and costs at current and future volumes, and the text turns the result into a timeline. A recommendation follows on public warehousing with a review point. A section on information systems ties a warehouse management system and bar code scanning to the current picking error rate, weighs RFID and sets a target. The conclusion links both decisions. The cost of picking errors, about $590,000 a year, is set against the cost of a warehouse management system, which makes the case for the technology in the same terms as the warehousing decision. A reasonable error target closes the systems section.
Reading the OPM 4150 Module 3 grading rubric
Mentors grade this assignment on correct breakeven calculations, accurate explanation of warehousing options and information systems, application to a specific problem and clear writing. Papers that show costs on both sides of breakeven, and set a point for revisiting the decision, show how analysis guides timing. Linking technology to a measured problem demonstrates practical judgment. Weighing RFID against bar codes on cost shows careful thinking. Putting a dollar figure on the problem a system solves, and comparing it with the system's cost, shows business judgment. Mentioning contract warehousing as a middle option shows full command of the choices. Costs on both sides of breakeven turn the formula into a decision timeline for managers. Stating units, such as hundredweight, avoids confusion.
Common OPM 4150 Module 3 mistakes, and how to avoid them
Students lose points by computing breakeven incorrectly, by recommending private warehousing without checking volume or by describing technology without a problem it solves. Others ignore growth. Divide fixed cost by the difference in variable costs. Compare costs at current and expected volumes. Tie systems to measured problems. Set a target for improvement. Put a cost on the problem your technology will solve, and compare it with what the technology costs to install and run. Remember growth: a decision right for this year may be wrong in three, so set a volume at which you will look again. A free first sample on your own OPM-4150 warehousing assignment is available on request.
Write yours, or have the desk draft it
This paper is an original model document written by our desk, not a submitted student paper and not an official Thomas Edison State University document. Read it for the moves, then write your own to the instructions in your classroom. If you want one built to your exact prompt and rubric, the first custom sample is free and arrives in 24 to 48 hours.
More OPM 4150 and B.S.B.A. in Operations Management sample papers
- OPM 4150 Module 1: Written Assignment: Total Cost of One Warehouse or Two
- OPM 4150 Module 2: Written Assignment: Truckload, LTL or Intermodal From Chicago?
- OPM 4150 Module 4: Written Assignment: Landed Cost of Prep Tables From Vietnam
- OPM 4150 Module 5: Final Project: A Logistics Strategy for a Restaurant Supply Distributor
- APS 4020 Module 10: Final Project: Quality Management in a Local Organization, a Paterson Wholesale Bakery
- OPM 3010 Module 5: Written Assignment: Control Charts for Loaf Weight and a Two-Stage Schedule
- OPM 4200 Module 5: Case Assignment: Taming the Bullwhip With Dealer Data
OPM 4150 Module 3 questions, answered
Where can I find a free OPM 4150 Module 3 sample paper?
A breakeven comparison of public and private warehousing, with a WMS plan, is the assignment above.
How is the breakeven volume between public and private warehousing calculated?
Divide the private warehouse's fixed cost by the difference between the public rate and the private variable cost per unit.
When is public warehousing better?
At low or uncertain volumes, because costs vary with use and no fixed commitment is needed.
What does a warehouse management system do?
It directs receiving, put-away, picking and shipping, and with scanning confirms the right item and quantity.
When is RFID worth its cost?
Typically for higher-value items or where reading many tags at once without line of sight saves labor.