Abstract: Mobile racks are broadly used in warehouses, especially in those with low items and large stock-keeping unit (SKU). However, contraction between storage capacity and rack efficiency may restrict the usage of mobile racks. Such an example in medicine industry is offered in this paper. Using Witness simulation software, a model is developed for medicine warehouse with mobile rack system. Simulations are executed to analyze rack efficiency in five different scenarios. All scenarios embody more or less low efficiency and long line in front of buffers. Results indicate that efficiency relies on policies of order-picking and space allocation. It can also be concluded that the minority items of small quantities and low frequency may decide the performance of the whole system.