WMS, Warehouse Labor & Fulfillment worked example

Material Handling Cost at 92% value-add utilization: a worked example

What does the result look like when value-add utilization reaches 92%? The full calculation is worked below with real intermediate numbers. An operations engineer benchmarks handling cost per move to justify reducing rehandling or adding conveyor automation.

The inputs for this scenario

  • Pallet moves per day: 320 moves (unchanged)
  • Cost per pallet move: 2.75 $/move (unchanged)
  • Value-add utilization: 92 % (raised for this scenario; the documented default is 80)
  • Equipment day rate: 180 $ (unchanged)

Working through the calculation

  • Applying the documented formula (Total cost = pallet moves x cost per move x value-add utilization% + equipment day rate) to the inputs above produces each figure below.
  • At this operating point the engine returns 990 $ for total material handling cost, the number this scenario is built around.
  • At this operating point the engine returns 3.09 $ / piece for material handling cost per unit.
  • At this operating point the engine returns 810 $ for variable material handling cost.
  • At this operating point the engine returns 180 $ for fixed material handling cost adder.

How this compares with the baseline

  • Against the tool's baseline example, where value-add utilization sits at 80% and the headline result is 884 $, this scenario comes in 11.95% above the baseline at 990 $.
  • A figure at this level is achievable when value-add utilization is genuinely sustained, not just peaked for a shift. Value-add utilization scales the variable move cost but does not itself flag non-value-add touches; a low utilization figure signals waste without pricing each wasted move separately.

Results at a glance

  • Total material handling cost: 990 $ (headline result)
  • Material handling cost per unit: 3.09 $ / piece
  • Variable material handling cost: 810 $
  • Fixed material handling cost adder: 180 $

Run it with your numbers

  • Every input above is editable in the live Material Handling Cost calculator, which recalculates instantly and can be shared with the inputs intact.

Last reviewed 2026-05-12.