Warehouse operations have become an important part of the retail industry today. For many companies in the retail industry, the profit margin can be as little as one cent for every dollar sold. Because of these extremely small profit margins, it is important that companies save as much in costs along the way as they can. One such way is to cut down on warehouse costs. In this paper, we shall study the costs of storing and retrieving products in a pick, pack and ship warehouse for an office supply company. In particular, we will examine possible ways to improve the flow of products into and out of reserve racking, by implementing different storage assignment policies. One way of finding the best possible storage assignments would be to formulate a cost equation along with constraints, and to minimize the cost using linear programming techniques. We shall study the Simplex Method, and we will use it to find optimal locations for a given set of storage tasks. However, the set of products to be stored and retrieved in our warehouse changes from day to day, and is subject to customer demand. Because there is no closed form solution or algorithm to find the optimal storage assignment policy under a random situation, we will use simulation techniques to study different storage assignment policies that could be applied in the warehouse. We will study the efficiency along with the maintenance requirements for each of the different policies and compare them with the current policy being used in the warehouse today.
Worcester Polytechnic Institute
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Eddy, Victoria M., "A Simulation Study of Warehouse Storage Assignment" (2004). Masters Theses (All Theses, All Years). 567.
simulation, simplex method, storage assignment, Warehouses, Management, Inventory control, Computer simulation