Industrial Pick-to-Light Application Feasability

To read 8 LDR inputs you need either an Arduino with 8 analog inputs (Arduino Leonardo, for example) or an analog multiplexer (CD4051, for example). The multiplexer needs 4 pin, three for address and one analog input pin.

An Arduino UNO/Arduino Leonardo only has 20 digital I/O pins (of which 6/12 can also do analog input). It is usually best NOT to use pins 0 and 1 of the UNO for anything other than serial I/O. With four pins going to an analog multiplexer that leaves only 14 pins for your 16 LEDs. You can use shift registers to control all 16 LEDs with 3 pins: