In this study, a space allocation problem for different yarn bobbins in a carpet factory is addressed and the problem is considered in the multi criteria decision making context. The factory produces yarn, of which raw material are wool or acrylic, for carpet production. However, the warehouse space assigned for the storage of yarn bobbins is limited and the size of the space required for the storage of each type of yarn should be determined. These allocated spaces will also be used as an upper bound over the production lot sizes. In this study, a warehouse space allocation policy is developed with respect to the yearly demand of yarn types and color tone inconsistency criteria. In the first phase of the procedure, a multiple criteria ABC analysis is applied to classify the yarn types into three ordered groups such as A, B and C. In the second phase, a data envelopment based approach is applied to partition the space among the types of yarn. Various scenarios are discussed and the results are compared with the current situation.