Warehouse Management PDF

Transportation and Logistics Warehouse Management Warehouse storage and Layout Problem-Warehouse Location A farm implements dealer is seeking a fourth warehouse location to complement three existing warehouses. There are three potential locations: Charlotte, NC; Atlanta, GA; and Columbia, SC...

Transportation and Logistics Warehouse Management Warehouse storage and Layout Problem-Warehouse Location A farm implements dealer is seeking a fourth warehouse location to complement three existing warehouses. There are three potential locations: Charlotte, NC; Atlanta, GA; and Columbia, SC. Charlotte would involve a fixed cost of $4,000 per month and a variable cost of $4 per unit; Atlanta would involve a fixed cost of $3,500 per month and a variable cost of $5 per unit; and Columbia would involve a fixed cost of $5,000 per month and a variable cost of $6 per unit. Use of the Charlotte location would increase system transportation costs by $19,000 per month, Atlanta by $22,000 per month, and Columbia by $18,000 per month. Which location would result in the lowest total cost to handle 800 units per month? Problem: Warehouse Given: Volume = 800 units per month Monthly total cost = FC + VC + Transportation cost Hence, Charlotte would have the lowest total cost for this monthly volume.  Storage Policies Randomized or Floating Storage – An incoming load does not have a specific space allocation in the warehouse; but either the storage or retrieval personnel decide the location or the management follow some policy. – Each policy will result in different utilization of warehouse areas and FIFO,FILO,LIFO,LILO etc. – Management enforced policies could be: Closest-open-space Farthest-open-space Longest-available-open-space Truly-random-open-space Storage Policies Dedicated Storage – This scheme assigns specific location or locations for each SKU (Stock Keeping Unit) based on some policy. The product or SKU always ends up at the same location. – The policies could use the criteria of : Popularity: This rule assigns locations to products based on their average number of orders per day. The items with highest popularity are stocked closer to outbound shipping dock. By CPO: Cube-per-order index is the ratio of a product’s storage space requirements to its popularity i.e. storage space requirements divided by the average number of daily orders. The products with the lowest CPO index are located closer to the outbound shipping dock. Other criteria could be shipping activity levels or total activity levels but we will not do them here. Problem: storage policies ◼ Consider the following seven products and warehouse configuration with eight aisles, each aisle having a storage capacity of 40,000 cubic feet. Aisles are numbers based on their closeness to the outbound docks. The warehouse is open 250 days in a year. Allocate the product to the storage locations based on: ◼ Popularity criteria ◼ CPO criteria (Cont’d) Problem: Storage Policies Inbound dock Col 1 Col 2 Col 3 Col 4 Expected Aisle 7 Aisle 8 Item Size, orders per Avg Product Cu Ft year Inventory Aisle 5 Aisle 6 A 6.00 6750 800 B 4.00 15750 16000 Aisle 3 Aisle 4 C 1.00 11250 25120 D 8.00 25500 18600 Aisle 1 Aisle 2 E 3.00 17750 12533 Outbound truck dock F 5.00 3500 3936 G 15.00 6250 907 Waiting Line Management of waiting line Measures of system performance include the average number of customers waiting. And that an arrival will have to wait for service. In waiting line decisions, the primary trade-off is the cost of having too many employees (cost of service or idle time) vs. the cost of not having enough employees (cost of waiting). Management of waiting line Queuing Model A table below provides a list of the symbols used for the infinite- source models. Introduction (Basic relationship) The average number of customer in the system = The average number of customer being served = where, The arrival and service rates, and respectively Note: arrival and service rates must have same units. Introduction (Basic relationship) = The average number of customers waiting for service = The average number of customers being served: = service rate = The average number of customers in the system (waiting and/or being served) Waiting Line Formula Problem- Waiting line λ = 3 customers/hour µ = 5 customers/hour M =1 1) What is the system utilization? 2) What is the average number of customers waiting for service? 3) What is the average time customers wait in line for service?