Publication Type

Journal Article

Version

submittedVersion

Publication Date

10-2019

Abstract

We study a problem of optimizing storage classes in a unit-load warehouse such that the total travel cost is minimized. This is crucial to the operational efficiency of unit-load warehouses, which constitute a crit- ical part of a supply chain. We propose a novel approach called the FB method to solve the problem. The FB method is suitable for general receiving-dock and shipping-dock locations that may not coincide. The FB method first ranks the locations according to the frequencies that they are visited, which are estimated by a linear program based on the warehouse’s layout as well as the products’ arrivals and demands. The method then sequentially groups the locations into a number of classes that is implementable in prac- tice. After forming the classes, we use a policy based on robust optimization to determine the storage and retrieval decisions. We compare the robust policy with the traditional storage-retrieval policies on their respective optimized classes. Our results suggest that if the warehouse utilization is low, different class-formation methods may lead to very different total travel costs, with our approach being the most efficient. We observe the robustness of this result across various parameter settings. A case study based on data from a third-party logistics provider suggests that the robust policy under the FB method outper- forms the other storage-retrieval policies by at least 8% on average, which indicates the potential savings by our approach in practice. One of our findings is that the importance of optimizing classes depends on the warehouse utilization.

Keywords

Logistics, Unit-load warehouse, Storage-retrieval policy, Class-based storage

Discipline

Business | Operations and Supply Chain Management

Research Areas

Operations Management

Publication

European Journal of Operational Research

Volume

278

First Page

186

Last Page

201

ISSN

0377-2217

Identifier

10.1016/j.ejor.2019.03.046

Publisher

Elsevier

Copyright Owner and License

Authors

Additional URL

https://doi.org/10.1016/j.ejor.2019.03.046

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