Costs of Alternative Loading and Unloading Strategies in a Cooperative Cotton Warehouse

This paper and presentation focus on evaluating alternative management strategies of operating a cotton warehouse. By developing alternative quality-driven strategies for organizing bales into the warehouse, the cost of breaking bales out of the stacks under the historic pattern of orders is calculated. Second, the number of orders broken-out of the stack at a given time is varied to determine the cost savings of working on more orders at a time. This sensitivity analysis is constrained by the policy that all or most orders must be staged by the requested loading date. The evaluation compares the current strategies with the alternatives. From this comparison, a cost difference is calculated in monetary terms by estimating the cost of each bale movement by a forklift with a bale clamp. Preliminary results indicate organizing the bales into the warehouse by gin code and account number results in a $5.98 and $8.30 million cost reduction, respectively. By identifying the alternative management strategies that provide the warehouse a cost savings, we identify an economic benefit that can be passed through to cooperative grower-owners. This analysis contributes to the cotton marketing economics dialogue generally, and specifically acts as a conversation starter around quality-driven warehouse management.