There are a few factors that warehouses have to decide before making the decision. They are, size of the product, value of product, product line and capital availability
Size of the product - This is the main factor to consider when deciding between the two systems. Carousel systems are only suitable to store small items such as drugs whereas live storage are only suitable for pallets or items with a flat surface.
Value of product - The value of product also affects the decision. A product of high value should be placed in the carousel system as it provides much better security as compared to live storage. This is because carousel system stores its goods in a closed container whereas live storage simply stores it on the rack, which makes it easily accessible to potential thieves. Carousel systems are also able to keep track of who and what is taken out from storage whereas live storage is not able to.
Product line - Product lines should be considered as each system handles different product lines differently. Live storage requires the inventory stored on the same row be of the same product line, only then FIFO can be achieved. It is a little bit of fixed location storage. Whereas carousel systems allows different product lines to stored in it. The order picker only need to input what he wants to retrieve and it will be automatically brought to the picker.
Captial availability - This is the limiting factor. The capital limits what a warehouse can install. A carousel system definitely has a higher initial setup cost as it is high tech as compared to live storage. However it ensures more accurate and easier picking as compared to the latter. Less workers are also need to tend to the security of the goods. It has good space efficiency too as compared to live storage.
