Assumptions (explicit):
- Baseline orders = 50,000/day. Peak multiplier 3x → peak orders = 150,000/day for 10 days.
- Average handling time (pick+pack) = 8 minutes per order.
- One warehouse shift = 8 hours; assume 80% productive time (20% for breaks, put-aways, QA, equipment downtime) → effective productive time = 6.4 hours (384 minutes) per worker/shift.
- Deliveries per vehicle/day = 40 (includes route time, loading).
- Temp staff cost fully loaded (wages + taxes + agency fee) = $25/hour.
- Leased vehicle cost (including driver or driver stipend + lease, insurance, basic fuel) = $120/vehicle/day.
- Add 10% contingency for surge/absences.
Calculations — Warehouse staff (pick + pack):
- Orders/day at peak = 150,000
- Total handling minutes/day = 150,000 * 8 = 1,200,000 minutes
- Total handling hours/day = 1,200,000 / 60 = 20,000 hours
- Effective hours per worker/day = 6.4 hours
- Workers required = 20,000 / 6.4 = 3,125 workers (round up to 3,125)
- With 10% contingency → 3,125 * 1.10 = 3,438 workers
Checks (alternative per-worker throughput):
- Orders per worker/day = 384 minutes / 8 = 48 orders → 3,125 * 48 = 150,000 orders
Calculations — Vehicles/drivers:
- Vehicles needed = 150,000 deliveries / 40 per vehicle = 3,750 vehicles
- With 10% contingency → 3,750 * 1.10 = 4,125 vehicles/drivers
High-level cost estimate (10-day peak period):
- Temp warehouse staff cost/day = 3,125 workers * 8 hours * $25/hr = $625,000/day
- For 10 days = $6,250,000
- With 10% contingency: $6,250,000 * 1.10 = $6,875,000
- Leased vehicles cost/day = 3,750 * $120 = $450,000/day
- For 10 days = $4,500,000
- With 10% contingency: $4,500,000 * 1.10 = $4,950,000
Combined high-level cost (10 days, incl. 10% contingency):
- Staff: ≈ $6.88M
- Vehicles: ≈ $4.95M
- Total: ≈ $11.83M
Considerations, trade-offs and recommendations:
- If overtime is acceptable, you could reduce headcount by using two 4-hour shifts or overtime to smooth hiring burden — but overtime premium raises per-hour cost and fatigue risk.
- Improve throughput via process improvements (batch picking, zone picking, conveyors) to reduce handling time from 8 → 6 minutes, which would cut required staff by ~25%.
- Consider partnering with last-mile carriers (vs leasing) to reduce vehicle capital/operational complexity — may be cheaper per delivery.
- Negotiate short-term fleet package rates and temp staffing blocks to lower unit costs; run a pilot day to validate assumptions (avg handling time, actual deliveries/vehicle).
- Monitor real-time KPIs (orders processed/hour, vehicle fill rates, on-time delivery) during peak to reallocate resources dynamically.
Key takeaway: For a 3x holiday peak (150k orders/day) you’d need ~3,125 pick-pack warehouse staff and ~3,750 delivery vehicles (add 10% contingency → ~3,438 staff and ~4,125 vehicles). Estimated 10-day incremental cost ≈ $11.8M under the assumptions above.
