Title

Optimizing storage-class formation in unit-load warehouses

Publication Type

Working Paper

Publication Date

7-2005

Abstract

We propose a new approach to optimize storage classes for a unit-load warehouse with a general layout.Under this approach, the "attractiveness" of each storage location is determined by the frequency of visits to the location. We estimate this frequency by solving a linear programming model, which considers the warehouse's layout and the products' arrivals and mean demands. We compare our frequency-based class formation method with a cost-based method and a grid-based method. Our numerical results suggest that if the warehouse utilization is low, different class formation methods may give rise to very different travel costs. Specifically, the frequency-based method outperforms the other two methods if demand variability is sufficiently low. This implies that both the layout and the product flow information is useful for class formation in this situation. We also refine the frequency-based method using the information of demand supports. The refined method outperforms all the other methods when demand variability is high.

Keywords

storage class, storage assignment, unit-load warehouse

Discipline

Business

Research Areas

Operations Management