Diagnose the constraint first
If poor slotting, obsolete stock or oversized pick faces are consuming locations, moving to a larger building can carry the same problem into more expensive space. Measure the current constraint before selecting the remedy.
Count disruption cost
Rack changes and moves can require downtime, temporary storage, permits, engineering, fire-protection review and operational retraining. Expansion decisions should include transition cost and risk, not only steady-state rent.
Consider flexibility
Third-party or overflow space can provide flexibility for peaks but may add transportation, handling, systems and inventory-control complexity. Permanent expansion offers control but creates a longer fixed commitment.
Use scenario totals
Compare a realistic annualized cost for each option and document the capacity gained, service impact and implementation constraints. A cost-per-added-position metric can be useful when the alternatives produce different capacity increments.
Practical questions
Should I use one utilization percentage for every warehouse?
No. Inventory profile, storage system, seasonality, staging demand, handling equipment and workflow can make the same percentage perform very differently in two facilities.
Can this guide be used to approve a rack or building change?
No. It is a planning resource. Structural, fire, building, accessibility and workplace-safety requirements must be established for the actual facility by the appropriate qualified parties and authorities.