Computers & Industrial Engineering 101 (2016) 1–9

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Computers & Industrial Engineering

journal homepage: www.elsevier.com/locate/caie

Layout design modelling for a real world just-in-time warehouse

Miguel Horta, Fábio Coelho, Susana Relvas ⇑
CEG-IST, Instituto Superior Técnico, Universidade de Lisboa, Av. Rovisco Pais, 1049-001 Lisbon, Portugal

a r t i c l e i n f o a b s t r a c t

Article history: The retail industry sector is one of the most competitive and where each company has to improve their
Received 26 August 2015 operations on a daily basis to remain competitive. The struggle to move to just-in-time delivery requires
Received in revised form 1 August 2016 distribution centres to readapt to this reality. Most of the literature in warehouse layout design is focused
Accepted 21 August 2016
in traditional warehouses, where the main focus is on product storage and picking. However, when oper-
Available online 22 August 2016
ating in a cross-docking basis, new approaches are required to plan the internal layout of the warehouse.
In this paper, it is proposed a mathematical programming approach, based on a min-max formulation
Keywords:
that returns the optimized layout of a cross-docking warehouse that feeds a just-in-time distribution
Warehouse management
Retail operations
operation. In this case, the layout requires the allocation of floor spaces to stores’ demands. Products
Layout are picked up at the receiving dock, and are transported by the worker along the warehouse up to the
Just-in-time location where the products for a given store are located. Then, the products are left in the required quan-
Cross-docking tity and the worker moves to the next store location that requires that product. To this end, we perform
Mathematical programming clusters of floor locations that may be used as locations to visit in product distribution routes. Our
approach was tested in a real world case study of a Portuguese retail chain in a fruits and vegetables
warehouse, which supplies more than 200 stores per day. We show that the distance travelled in the
warehouse can be reduced in more than 2000 km/month by just reallocating stores to different floor
locations.
Ó 2016 Elsevier Ltd. All rights reserved.

1. Introduction answer promptly to this pressure, one option is to use cross-

The current pressure to increase the service level and reduce
costs along with the increasing complexity of supply chains create
considerable logistics challenges to retailers (Fernie & Sparks,
2004). Nowadays, retailers have a great power in controlling the
distribution of goods in reaction to customer demand. Their control
can be as wide as from production up to end-user distribution
(Fernie, Sparks, & McKinnon, 2010).
Warehouses are an essential component of any supply chain.
Their major roles are: (1) buffering the material flow along the sup-
ply chain; (2) consolidation of products from multiple suppliers;
(3) performing value added activities such as kitting, labelling,
and product customization (Gu, Goetschalckx, & McGinnis, 2007).
With the increasing focus on the supply chain performance opti-
mization by managers, warehouses are recognized as an area
where significant performance improvements can be achieved
(Won & Olafsson, 2005).
However, recent practices in this sector strive for speed of
response, such as, for instance, just-in-time delivery to stores. To
⇑ Corresponding author.
E-mail address: susana.relvas@tecnico.ulisboa.pt (S. Relvas).
docking warehouses, where receive, sort and regroup and ship
are the main operations undertaken (van den Berg & Zijm, 1999).
In order to be efficient, this type of warehouses has to be efficiently
designed, where the layout definition is included.
Richards (2011) stated that the choice of a suitable warehouse
layout should increase the throughput, reduce costs, improve the
service provided to the customers and provide better working con-
ditions. There are different studies in the literature that addressed
the warehouse layout problem. However, these studies generally
focus on conventional warehouses, e.g. having the storage func-
tion. The literature that addresses methods for managing ware-
houses operating in just-in-time (JIT)/cross-docking environment
is scarce.
Vis and Roodbergen (2011) proposed three different concepts
and procedures that can be used to design a layout in a cross-
docking environment: fixed layout, category-based layout and
flexible layout. The first methodology aims to design a warehouse
layout that is fixed for considerable time period. A fixed layout is
characterized by a fixed number of aisles or by a fixed aisle length,
with a non-fixed variable derived from the warehouse capacity
requirements for the considered time period. The category-based
layout seeks to incorporate more flexibility than the previous

http://dx.doi.org/10.1016/j.cie.2016.08.013
0360-8352/Ó 2016 Elsevier Ltd. All rights reserved.
2 M. Horta et al. / Computers & Industrial Engineering 101 (2016) 1–9
procedure. In this methodology, daily activity can be categorized
based on the information available at the start of the day. For each
category a fixed layout can be determined using the previous
methodology. Finally, a flexible layout is defined as a layout that
changes every day according to the expected daily activity.
The three methods and concepts described above focus on the
layout design, in particular on the knowledge of the number of
aisles and its length. If the location of the unit loads (orders) in
the warehouse can be changed, it leads to a change on the aisles
size and on the layout structure. In these cases, normally there is
no physical layout structure in the warehouse. Vis and
Roodbergen (2008) approaches this problem for a cross-docking
centre with the objective to minimize the distance travelled in
the warehouse. The problem is modelled as a minimum cost flow
problem and it is assumed that the reception and the shipping
docks location are known for a particular order, beforehand.
Sandal (2005) also addresses the same problem, but focusing
exclusively in the space close to the shipping docks. In this study,
the author demonstrates the importance of the shipping priority
by allocating orders to areas next to shipping docks, according to
that criterion. More generalist methods, such as the method pre-
sented by Frazelle (2002), approaches the problem of locating high
adjacency requirements’ departments/functions at nearby loca-
tions in the warehouse. Temporary storage problems in cross-
docking systems are revised in Belle, Valckenaers, and Cattrysse
(2012), who highlight the scarcity of works in this area.
The literature is scarce in terms of methods addressing the lay-
out design on cross-docking environments. This was pointed out as
one literature gap by Vis and Roodbergen (2011). In their recent
review, Ladier and Alpan (2016) briefly address the layout problem
in cross-docking environments, underlining that this is maintained
as gap in the literature.
In terms of optimization objectives found in the literature, these
are mainly related with the distance travelled (de Koster, Le-Duc, &
Roodbergen, 2007). Ladier and Alpan (2016) describe some key
performance indicators (KPI) for measuring cross-docking opera-
tions and suggest that these KPIs may be used for planning related
optimization models. Some KPIs that may be related with the lay-
out design problem herein addressed suggested by the authors are
(besides distance travelled) balanced workload, congestion, even
total product stay time, door utilisation, number (of pallet)
touches. Other KPIs have referred, such as in the work by Larson,
March, and Kusiak (1997), where floor utilisation is used.
The main contribution of this paper is to propose a new ware-
house layout design approach namely for the allocation to retail
stores to pre-dimensioned floor spaces, based in mathematical pro-
gramming techniques, that is suited for a cross-docking environ-
ment. In this cross-docking warehouse, the flow of products
starts at the receiving docks, moves to the next store requiring
the product and visits as many floor locations as stores requiring
that product until the container is empty. This is a special case of
warehouse layout design since the layout here is defined as the
allocation of warehouse floor space to every stores, where the
space allocated has to be large enough to receive the daily demand
of each store. The space per store will be empty before the opera-
tion start and full before shipping. This model incorporates two cri-
teria that were identified in the literature review: the distance
travelled in the warehouse (Vis & Roodbergen, 2008) and the
orders shipping priorities (Sandal, 2005).
This paper is organized as follows: Section 2 presents the
methodological approach, including the proposed IP model to
address the problem at hand. Section 3 presents briefly the real
world case study used to exemplify the benefits of the proposed
approach. Section 4 presents the results obtained as well the discus-
sion of the results. The paper ends with the conclusions in Section 5.
2. Methodological approach
Our approach is based in a mathematical programming model
that was developed to determine the allocation of the stores to the
available warehouse floor locations in order to minimize the dis-
tance travelled in the warehouse and to take into account the orders’
shipping priorities. Given the characteristics of the problem at hand,
the model developed is an Integer Programming (IP) Model. The
model is assumed to be the main focus of this paper and is intended
to be solved using a commercial solver (specified in Section 4).
The total distance travelled in the warehouse is divided into
two parts: the distance travelled in the picking operation and the
distance travelled during the shipping operation. The picking oper-
ation may also be divided into picking of different logistics units,
such as carton boxes and plastic boxes. We hereby consider that
two different logistic units are present in the picking operation,
originating two areas per warehouse floor location, one area for
products in carton boxes and another area for products in plastic
boxes. This division of the warehouse locations by logistic unit type
aims to improve the efficiency on the construction of the pallets by
the employees, as the plastic boxes have a standard size and are
easily stackable.
The model considers the floor capacity of each space floor loca-
tion and floor requirements of each store, divided by logistic unit
type. The model also ensures that the shipping priorities of the
stores are respected as the highest priority stores can only be allo-
cated to the warehouse locations situated closer to the shipping
docks. In this section we will define the assumptions taken into
consideration in our approach (Section 2.1), the general problem
definition (Section 2.2), the model building concepts (Section 2.3)
and we will finish with the model formulation presentation
(Section 2.4).
2.1. Main assumptions
The development of the IP model proposed is based in some
main assumptions, which are listed below:
– (A1) The warehouse is rectangular and has docks on two sides
of the warehouse, located in opposite sides (Fig. 1);
– (A2) The reception operation is carried out only on one side of
the warehouse, while the shipping operation can be performed
at the docks located on both sides of the warehouse. This
assumes that the receiving operation is completed prior to the
picking operation, which frees the receiving docks to fulfil the
needs of the shipping operation (Fig. 1);
– (A3) It is defined a reception point from where all the picking
operations start and two shipping points, located on opposite
sides of the warehouse, where the orders are shipped (Fig. 1).
These points are located in the mid distance of the side of the
warehouse where the docks are located. The definition of recep-
tion and shipping midpoints aims to reduce the model complex-
ity that would result from the computation of the distance from
each warehouse dock to each warehouse floor location. In addi-
tion, the computation of these distances would require knowing
the assignment of the trucks to the shipping docks. For cross
docking centres, this problem is addressed in the literature by
various authors (Bartholdi & Gue, 2000; Miao, Lim, & Ma,
2009; Tsui & Chang, 1992);
– (A4) Each warehouse location is divided into two areas, one
space for products in carton boxes and another area for prod-
ucts in plastic boxes, which are defined by their capacity;
– (A5) Each warehouse location is defined by one overall capacity
(which is subdivided in capacity per area dedicated to one type
of logistic unit), the minimum operational distance to one
 M. Horta et al. / Computers & Industrial Engineering 101 (2016) 1–9
Fig. 1. Warehouse shape, dock function and reception and shipping points.
reception point and the minimum distance to one of the ship-
ping points;
– (A6) The overall layout of floor locations vs. access areas is
known and may have any configuration (i.e., it is not required
to have a specific orientation as in Fig. 1);
– (A7) During the picking operation, each employee can visit, to
distribute the contents of one pallet of one product, several
warehouse locations within the same picking route, fulfilling
the demand of more than one store.
2.2. Problem definition
The general problem at hand can be defined as stated bellow.
Given:
– A set of available floor locations in the warehouse and a set of
stores to allocate to those same locations;
– The distance from the reception point to each space floor
location;
– The distance from each space floor location to two shipping
points;
– The space capacity, expressed in logistic units (pallets for exam-
ple), of each space floor location for a given time period;
– The space requirements, expressed in logistics units, for each
store for a given time period;
– Number of pickings (products) required for each store for a
given time period;
– Number of pallets shipped to each store in a given time period;
– The average number of pickings per pallet for a given time
period;
Determine:
– The assignment of the stores within the warehouse, defining the
allocation of the stores to the available warehouse floor
locations;
So as to minimize the total distance travelled in the warehouse,
taking into account the stores shipping priorities.
3
2.3. Model building concepts
The proposed methodology will derive the allocation of stores
to floor locations, minimizing the total distance travelled within
the warehouse. The distance will be the sum of the picking and
shipping distance. In the shipping distance, it is considered that
each store orders’ are moved from the floor location to the shipping
dock independently from other stores – each store will have mul-
tiple pallets and their movement is done in one or more pallet
truck routes.
On the other hand, the picking distance is more elaborated.
Consider one pallet of boxes of bananas. This pallet will be dis-
tributed, usually, by more than one store. In this way, the picking
distance is obtained by the distance travelled in a route that visits
more than one floor location. In order to overcome the routing
problem, integrated with the allocation problem, our model is built
over the concept of clusters of floor locations.
A cluster of floor locations is a group of N floor locations, that
are neighbours (i.e., they are immediately located side-by-side)
and that will be visited by one worker in one picking route. In this
way, if the picking starts in floor location a1, it will continue until
floor location ax, where x is the number of floor locations in that
cluster. Thus, the distance travelled in this route is the distance
from the reception point to location a1, the linear distance (we only
assume linear clusters, i.e., all floor locations located in the same
aisle) of the cluster and the distance from location ax to the recep-
tion point, so the worker can start a new picking operation. In the
example of Fig. 2, a cluster with 6 floor locations is exemplified.
In order to define the number of floor locations per each cluster,
we require specific data from the problem at hand. This data will
enable to calculate, for the period of data gathered, the average
number of stores whose demand is fulfilled from one pallet. With
this data, a fixed size of clusters is defined. The required data
encompasses the following items: (i) the list of stores to whom
the demand has to be fulfilled and adequately numbered, (ii) the
list of floor locations adequately numbered, (iii) the distance from
each floor location to the reception point, considering that each
floor space is divided in carton and plastic boxes and that this divi-
sion may require different distances to the reception point, (iv) the
4 M. Horta et al. / Computers & Industrial Engineering 101 (2016) 1–9

a1
a2
a3
a4
a5
a6

Fig. 2. Routing problem in a linear cluster of floor locations.

distance from each floor location to the shipping point, (v) the
aggregation of floor locations to clusters adequately numbered,
that is obtained by aggregating neighbour floor locations on groups
of floor locations with a total number of y floor locations, where y
is the average number of number of stores from which the demand
can be fulfilled from one pallet, (vi) the distance to reception and
shipping points from each cluster, considering that the distance
is the total distance travelled to and from the cluster (round trip),
(vii) demand per store in pallets during the time period covered by
the data (e.g. monthly) that will determine the demand per cluster
in pallets, (viii) number of SKUs demanded per store during the
time period covered by the data (e.g. monthly) that will determine
the number of visits to that cluster (equal to the number of visits of
the store that requires a higher number of different SKUs), (ix)
capacity in pallets of each floor location, (x) floor space require-
ments in terms of pallets daily for each store and (xi) if store is con-
sidered to have priority in shipping.
In this way, as model data, it is required to feed the number of
floor locations per cluster as well as the actual allocation of floor
locations to clusters, which is numbered beforehand. Since we only
consider linear clusters, we might have clusters of different sizes
due to the reaching of aisle end. For instance, in Fig. 2, each half
aisle has 10 floor locations, the cross-aisle and then more 10 floor
locations. If linear clusters of 6 floor locations are used, the com-
plete aisle has 20 floor locations and, thus the final 2 locations will
be contained solely in a cluster. Cluster construction is done
beforehand and based in the linear clusters and fed as model data.
2.4. Model formulation
s – set of stores to allocate to the warehouse space floor loca-
tions, s 2 S;
cl – set of clusters of warehouse floor locations, cl 2 CL.
Subsets
HS – subset of stores that have a high shipping priority, HS # S;
LS – subset of stores that have a lower shipping priority, LS # S;
Note: HS [ LS ¼ S.
Parameters
capf – floor capacity (in number of pallets) of the warehouse
floor location f for given time period;
ycl;f – indicates the allocation of warehouse floor location f to
each cluster cl;
distSf – distance from the warehouse floor location f to the ship-
ping point;
distPcbcl – distance related to the picking operation in the clus-
ter of areas cl (for picking of carton boxes);
distPpbcl – distance related to the picking operation in the clus-
ter of areas cl (for picking of plastic boxes);
PSs – number of pallets shipped to store s within a given time
period;
Ds – average requirements (in number of pallets) of the store s
for a given time period;
Rs – average space requirement (in number of warehouse floor
location) of the store s for a given time period. Eq. (1) illustrates
the computation of this parameter.

The model formulation uses the following indexes, sets, param-

& ’
eters and variables. Ds
Rs ¼ ; 8s 2 S ð1Þ
capf
Indexes and sets
ppb – percentage of plastic boxes picked compared to the total
f – set of available floor locations in the warehouse, f 2 F; number of boxes picked for a given time period;
 M. Horta et al. / Computers & Industrial Engineering 101 (2016) 1–9
pexps;f – indicates the possible warehouse floor locations f
where a store s can be allocated according to its shipping prior-
ity. This parameter equals 1 if the store s can be allocated to the
floor location f (otherwise equals 0);
NSs – number of pickings of the store s for a given time period.
Variables
xs;f – binary variable that equals 1 if the store s is allocated to
the warehouse floor location f (otherwise equals 0);
NV cl – non-negative integer variable that indicates the number
of visits to the cluster cl;
Mathematical formulation
Given the indexes, sets, parameters and the variables presented,
the generic model developed to be applied to the case study is
formulated as follows:
X tres are organized by warehouse type, each one supporting one
Min ½distPcbcl  NVcl  ð1  ppbÞ þ distPpbcl  NV cl  ppb
cl2CL
XX
þ ½distSf  xs;f  PSs 
f 2A s2S
NV cl P NSs  xs;f ; 8cl; f : ycl;f ¼ 1; 8s 2 S
X
xs;f 6 1; 8f 2 F
s2S
X
xs;f 6 Rs ; 8s 2 S
f 2F
xs;f 6 pexps;f ; 8s 2 S; 8f 2 F
X The picking operation in a conventional warehouse consists in
xs;f  capf P Ds ; 8s 2 S
f 2F
xs;f 6 xs;f þ1 þ xs;f 1 ; 8s : Rs P 2; 8f 2 F
xs;f 2 f0; 1g
NV cl 2 Zþ
The objective function of the model aims to minimize the total
distance travelled in the warehouse (2). The first term is related
with the distance travelled during the picking of products in carton
boxes, while the second term represents the distance travelled
during the picking of products in plastic boxes. The third and last
term is related with the distance travelled in the warehouse during
the shipping operation.
Constraint (3) ensures that the number of visits to a cluster will
be greater or equal than the largest number of pickings of the
stores that were assigned to that cluster. In order to guarantee that
the number of visits to a cluster (NV cl ) equals the number of pick-
ings of the most visited store of the cluster, this variable is mini-
mized in the objective function, establishing a Min Max
formulation (Shimizu, Ishizuka, & Bard, 1997). Constraint (4) guar-
antees that each warehouse space floor location cannot be allo-
cated to more than one store.
Constraint (5) limits the number of space floor locations that
can be allocated to one store. Thus, this constraint ensures that
the number of space floor locations assigned to one store will be
less or equal than the average space requirements (in number of
warehouse floor locations) of that store.
Constraint (6) limits the possible space floor locations that can
be assigned to one store according to its shipping priority.
This constraint ensures that stores shipping priorities are satis-
fied by restricting the location of stores that have a high shipping
priority to space floor locations located next to the shipping docks.
Constraint (7) guarantees that each store is located in one or
more space floor location(s), which have a total space capacity
greater or equal than the store space requirements.
Constraint (8) ensures that if a store needs to be allocated at
least to two space floor locations that store will be assigned to con-
5
tiguous space floor locations. By assigning one store to contiguous
warehouse areas it will avoid errors in the shipping operation
(such as the loading of a wrong pallet in one truck), since all the
pallets of one store will be located side-by-side. Moreover, the pal-
let construction is also facilitated, as it is possible to transfer boxes
from one pallet to another pallet of the same store in order to prop-
erly construct the pallets and to optimize the truckload capacity.
Also, it is assumed that the set of space floor locations is organized
according to contiguity warehouse criteria.
Finally, the constraints (9) and (10) define the variables domain.
3. Case study
3.1. Brief description of the warehouse operation
The company in study operates in the Portuguese food retail
business, owning a country wide operation. The distribution cen-
type of products (products with stock, fresh products, fish, meat,
frozen products).
ð2Þ In this paper, we address the layout of a fresh products’ (fruits
and vegetables) warehouse. This warehouse operates in a JIT envi-
ð3Þ ronment. Unlike conventional warehouses, in this type of ware-
ð4Þ houses, the products remain, in general, a short time in the
warehouse. Therefore, in this type of warehouses the products
ð5Þ are not stored. Besides that, the main operational difference of a
warehouse that operates in JIT is the picking operation, when com-
ð6Þ pared to a typical warehouse.
ð7Þ collecting different products in the warehouse, according to one
(or more) order(s), and places them on a pallet that will be shipped
ð8Þ to the customer. In a warehouse that operates in JIT, the warehouse
ð9Þ employee starts the picking operation with a full pallet of a certain
ð10Þ product and travels through the warehouse in order to distribute
the pallet content by the warehouse space floor locations of the cli-
ents (in this case stores/supermarkets) that ordered that product.
So, it can be concluded that this difference in the picking operation
will influence the warehouse layout, since its area has to be divided
into dedicated spaces for each one of the stores that are served by
the warehouse.
3.2. Warehouse layout
The current layout of the fresh products’ warehouse studied in
this paper is rectangular and has docks in both longer sides of the
warehouse. While the receiving operation is carried out only at the
docks of one side of the warehouse, the shipping operation can be
performed on both sides docks of the warehouse. Due to confiden-
tiality reasons, the current layout cannot be displayed in figure.
In terms of space allocation, the locations placed at the centre of
the warehouse have a space capacity of 18 pallets, while the loca-
tions positioned near the docks have a smaller space capacity (11
and 12 pallets). The space capacities are defined on a daily basis,
as the maximum duration of the products in the warehouse is
equal to 24 h.
4. Results
This section covers the application of the model to the case
study described in Section 2. The model was implemented with
GAMS (General Algebraic Modelling System) language, 24.1.3 ver-
sion and was run by the algorithm CPLEX, version 12.5, in an Intel
Core Due 2.4 GHz machine with 4 GB RAM.
In Section 4.1 three different scenarios are presented and anal-
ysed. The scenarios are compared in Section 4.2 based on the
6 M. Horta et al. / Computers & Industrial Engineering 101 (2016) 1–9

monthly distance travelled in the warehouse and on the ware- 8000

Distance (km/month)
house occupancy rate, defined as the ratio between the number
of occupied space floor locations and the total number of locations 6000
available in the warehouse. In Section 4.3 a sensitivity analysis is
performed in order to evaluate the impact of changing the param- 4000
eters of the model that may be subject to higher uncertainty. Sec-
tion 4.4 presents the computational results. 2000

4.1. Scenarios 0
Total Picking Shipping
Three different scenarios are studied in this paper: a current distance distance distance
scenario, a best-case scenario and a future scenario (in 3 years). Fig. 4. Best-case scenario: Distance travelled indicators.
It was decided to analyse a future scenario since the company plan
to maintain the fruits and vegetables products in the same ware-
house for a minimum time period of 3 years. 10000

Distance (km/month)
4.1.1. Current scenario 8000
The first scenario aims to evaluate the layout that is currently
6000
implemented in the warehouse. In this scenario the stores loca-
tions were fixed according to their actual allocation in the 4000
warehouse.
The total distance travelled in the warehouse was equal to 2000
9428 km per month (Fig. 3). In this scenario, the distance travelled
0
during the picking operation accounts to 79.6% of the total distance Current Best-case
travelled in the warehouse. The warehouse occupancy rate was scenario scenario
equal to 83.7%.
Fig. 5. Comparison: Current vs. Best-case scenario.
4.1.2. Best-case scenario
This scenario corresponds to the application of the model to the
Table 1
case study with the assumptions made for each parameter and no Savings obtained from the best-case scenario in rela-
additional restrictions. tion to the current scenario.
The application of the model in this scenario led to a total dis-
Savings
tance of 7266 km per month (see Fig. 4). In this case, the picking
Distance reduction (km/month) 2162
operation represents 77.9% of the total distance travelled in the
Distance reduction (km/day) 83
warehouse. The warehouse occupancy rate remained equal to Reduction in daily hours of operation 20.8
83.7%. Potential reduction of employees 2
By comparing the current scenario with the best-case scenario
it can be concluded that the layout proposed in the best-case sce-
nario can lead to a reduction of the total distance travelled in the the company can also be more efficient by maintaining the same
warehouse by 23% (see Fig. 5). number of employees for an increase in the warehouse activity
In Table 1 the potential savings of the best-case scenario com- level.
pared to the current scenario are presented.
In Table 1 it is possible to see that the allocation of the stores in 4.1.3. Future scenario
this best-case scenario enables a reduction of the distance travelled This scenario corresponds to a future scenario (in 3 years)
monthly in the warehouse by 2162 km. Considering that the ware- where is considered a growth in the number of picked boxes. Based
house operates 26 day per month, a reduction of 83 km per day can on historical data, it was agreed with the company that annual
be achieved. In turn, knowing that the forklifts used in the ware- growth rate studied in this scenario was equal to 6%.
house moves at a maximum speed of 4 km per hour, it can be con- This growth rate was considered to be equal to all stores and
cluded that is possible to reduce 20.8 h of operation per day. This results from three factors. The first factor that contributes to this
reduction leads to the conclusion that it is possible maintain the growth is the growth trend in the market share of company’s retail
same warehouse activity level with less 2 employees (assuming stores. The second factor is related to the reduction of the average
that each employee works in average 7.5 h per day). However, price of the goods that are sold in the Portuguese supermarkets.
This price reduction has the objective to stimulate the consump-
10000 tion and is also a result from the growing competition in the mar-
ket. The last factor is related with the repackaging strategy adopted
Distance (km/month)

8000 by the suppliers. Nowadays consumers visit supermarkets more

frequently and buy less at each visit. Therefore the suppliers
6000
choose to reduce the product quantity and, consequently, the pack-
4000 age in order to stimulate the consumption. All these factors con-
tribute towards an increase in the number of pickings and in the
2000 number of pallets shipped by the warehouse.
The total distance travelled in the warehouse in this scenario
0
was equal 8057 km per month (see Fig. 6). Nearly 75% of the total
Total Picking Shipping
distance distance distance distance is travelled in the picking operation.
In this scenario it was verified an overall change in the stores’
Fig. 3. Current scenario: Distance travelled indicators. assignment in the warehouse in comparison to the best-case sce-
 M. Horta et al. / Computers & Industrial Engineering 101 (2016) 1–9 7

nario. This change is justified by the need of one additional ware- 10000
house location by 8 stores. In turn, the need for one additional

Distance (km/month)
space by 8 stores results from the growth in the number of pallets 8000 Current scenario
shipped by the warehouse. As mentioned previously, the model layout
ensures that if a store needs more than one space floor location 6000
Best-case scenario
that store will be assigned to contiguous space floor locations. This layout
factor contributed to change the stores disposition in the ware- 4000
house, since the locations to be assigned to these 8 stores were Future scenario
2000 layout
already occupied in the best-case scenario.
In this scenario the warehouse occupancy rate was equal to
86.9%, which represents an increase compared with the value 0
obtained for this indicator in the previous two scenarios (83.7%). Fig. 7. Comparison of the monthly distance travelled in the warehouse for the three
By comparing the best-case scenario with this scenario, it can scenarios.
be concluded that the monthly distance travelled in the warehouse
increased 10.9%.
Table 2
Savings of the layouts obtained in the best-case scenario and in the future scenario
4.2. Scenarios comparison when compared to the current scenario.

In Fig. 7 it is possible to see the comparison of the monthly dis- Savings Best-case scenario Future scenario layout
layout vs. current vs. current scenario
tance travelled in the warehouse for the layouts obtained in each scenario
scenario. In order to make a fair comparison the layout obtained
Distance reduction 2162 1554
in the future scenario was run with current data. From the analysis
(km/month)
of the figure, it can be conclude that the layout obtained in the Distance reduction 83 60
best-case scenario allows achieving a greater gain of immediate (km/day)
efficiency (reduction of the total distance in 23%). However, this Reduction in daily hours 20.8 14.9
of operation (h/day)
layout is not projected for the future, as it is not considered an
Potential reduction of 2 2
increase in the number of pickings. On the other hand, currently employees
the layout obtained in the future scenario does not lead to such a
significant gain in efficiency (reduction of the total distance in
16.5%) but it is designed considering a future growth.
The parameter analysed was the number of pickings per pallet
It should be noted that the implementation of the layout
given the high standard deviation obtained for this parameter from
obtained in the best-case scenario might imply future costs, arising
the data gathered and the impact that this parameter has on the
from possible changes in the location of the stores in the ware-
model solution. As mentioned previously, this parameter determi-
house in order to adapt the layout to an expected increase in the
nes the size of the clusters and, therefore, the locations that consti-
warehouse activity level. These changes involve modifications in
tute each cluster and distance travelled during the picking
the warehouse management system used by the company and a
operation. In this section the impact on the model resulting from
new adaptation of the employees to a different work environment.
a positive and a negative variation in the number of pickings per
In Table 2 are represented the potential savings of the layouts
pallet, in an amount equal to the standard deviation obtained for
obtained in the best-case scenario and in the future scenario com-
this parameter, is analysed.
pared to the current scenario. As it was mentioned above, the
The results of this analysis are shown in Fig. 8. It can be con-
reduction of the monthly distance travelled in the warehouse is
cluded that a positive and a negative variation in the number of
greater for the layout of best-case scenario. For each one of the lay-
pickings per pallet by approximately 31% results in a reduction
outs a reduction in daily hours of operation was obtained (follow-
of the distance travelled in the warehouse by 22% and in an
ing the same reasoning that was already presented in this paper).
This hourly reduction shows that implementation of both layouts
allows that the current warehouse activity can be maintained with
less 2 employees. 10000
Distance (km/month)

8000
4.3. Sensitivity analysis
6000

In order to assess the robustness of the results a sensitivity 4000 Shpping distance
analysis was performed. To perform this analysis the best-case sce- 2000 Picking distance
nario was used as a basis of comparison.
0
9 13 17
Number of pickings per pallet
10000
Distance (km/month)

8000 Fig. 8. Number of picking per pallet analysis.

6000
4000 Table 3
Sensitivity analysis to the number of pickings per pallet: current and best-case
2000 scenarios.
0 Number of pickings per pallet 9 17
Total Picking Shipping
Total distance – current layout (km/month) 11,602 8054
distance distance distance
Total distance – layout proposed in the best-case scenario 9499 6491
(km/month)
Fig. 6. Future scenario: Distance travelled indicators.
8 M. Horta et al. / Computers & Industrial Engineering 101 (2016) 1–9
Table 4
Computational results of the IP model.
Scenario Total variables Binary variables Constraints
Current 47,553 0 47,970
Best-case 47,553 38,186 50,369
Future 47,553 38,186 52,329
increase by 20.6%, respectively. An increase in the average number
of pickings per pallet, with the same pallet of a given product, more
stores can be visited in the same picking route and that an
employee needs to return fewer times to the receiving docks to col-
lect new pallets. Therefore, it is easily concluded that an increase in
the number of pickings per pallet results in a decrease in the dis-
tance travelled in the warehouse (and vice-versa). Nevertheless,
the distance variation is less sensitive than the variation in number
of pickings per pallet imposed to the model.
The variation in the number of pickings per pallet caused a
change in the allocation of the stores in the warehouse that was
obtained in the best-case scenario. Although there has been a
change in the disposition of the stores, it turns out that the layout
that was proposed in the best-case scenario continues to lead to a
reduction in the distance travelled in the warehouse with a varia-
tion of the number of pickings per pallet (see Table 3). For any case
analysed (number of pickings per pallet equal to 9 and 17) the
solution obtained in the best-case scenario leads to an efficiency
gain in terms of distance travelled in the warehouse. This efficiency
gain is equal to 18.1% if the number of pickings per pallet is equal
to 9 and equals 19.4% if the parameter analysed equals 17.
4.4. Computational results
Table 4 presents the computational results for the implementa-
tion of the model to the different scenarios. The base scenario has
no binary variables since they are prefixed within the model – it
just calculates the distance travelled in the current solution. The
computational times are quite high for the other two scenarios
and still presenting high relative gaps. This is mainly related to
the usage of the MinMax formulation, which usually leads to good
solutions but being hard to prove optimality (Fang & Wu, 1996).
In order to assess the quality of the solutions obtained, a simple
test was done. Instead of having as a variable the number of visits
to one cluster (NV cl ), it was assigned an average number of visits to
each store in each cluster. The optimal solution was obtained after
6 s but the total distance travelled per month was 10.5% higher
than the distance travelled in the Best-Case scenario. Thus, the
solutions obtained with the MinMax formulation have good qual-
ity, despite the fact that CPLEX is not able to prove it.
5. Conclusions
The problem studied in this paper is related to the layout of a
fresh products’ warehouse that operates in a JIT environment.
The layout of the warehouse studied in this paper consists in an
open area that is divided in several space floor locations that are
assigned to the clients (stores in this case), where the products
are placed according to the daily orders. Based on the conducted
literature review, a mathematical integer programming model is
proposed to solve the problem. The model aims to determine the
allocation of the stores to the available space floor locations in
order to minimize the distance travelled in the warehouse (Vis &
Roodbergen, 2008) and to take into account the orders shipping
priorities (Sandal, 2005).
The results show that, according to the information used, the
distance travelled in the warehouse can be reduced if the current
Iterations Computational time Relative gap (%)
0 3.6 s 0.0
902,888 2.5 h 76.6
5,418,395 24 h 73.8
operation scenario is changed. It was concluded that with the lay-
out obtained in the best-case scenario (Section 4.1.2) the monthly
distance travelled in the warehouse can be reduced by 23%. This
reduction allows that the same warehouse activity level can be
maintained with less two employees. A future scenario (in 3 years)
was also studied in this paper. In this scenario (Section 4.1.3) it was
assumed an annual growth rate of the number of boxes picked in
the warehouse in 6%. This growth rate led to an increase in the
warehouse occupancy rate and to a change in the disposition of
the stores in the warehouse, which resulted from an additional
need of one space floor location by some stores. Despite the
increase in the distance travelled in the warehouse in relation to
the best-case scenario, the distance obtained in this future scenario
was still 14.6% less than the currently distance travelled in the
warehouse.
In the sensitivity analysis the parameter that has more impact
in the model and that is more uncertain was analysed: the number
of pickings per pallet. The variation in the number of pickings per
pallet caused a change in the distance travelled in the warehouse
and in the disposition of the stores in relation to the best-case sce-
nario. However, it is important to state that the disposition of
stores in the warehouse obtained in the best-case scenario contin-
ues to lead to reductions in the distance travelled in the warehouse
(between 18% and 19%) with a variation of the number of pickings
per pallet.
The main limitations of the proposed method are related with
the assumptions made, namely related with the number of receiv-
ing and shipping points. Another limitation is related with the
solution approach, namely by using the MinMax modelling and
implemented by an exact optimization method solved by a com-
mercial solver (CPLEX), which gives rise to long computational
time. Distances have been considered in a straightforward manner
(i.e., the shortest distance to arrive to one location, instead of using
common rules to operate picking operations). The aggregation of
products implies that demand is only managed at the pallet level,
eliminating particularities of demand per product. These limita-
tions give rise to the need to expand the capabilities of the model.
Some future studies can therefore be performed regarding the
problem addressed in this paper. First it would be important to
analyse weather a layout change may cause delays in the shipping
operation and a consequent reduction of the service level provided
to the stores. It would be also interesting to perform a simulation,
before the implementation of the new layout, of the aisles conges-
tion per time period. In terms of the modelling, the MinMax formu-
lation may be revised and improved. Additionally, there is
potential to incorporate in the model a routing problem in order
to consider the different routes of the employees during the pick-
ing operation. In this paper the warehouse locations were grouped
into clusters according to the average number of pickings per pal-
let. However, since the distance between contiguous warehouse
areas is small and since most of products are ordered by most of
the stores, the considered assumption may have a small impact
in the monthly distance travelled in the warehouse. Finally, as an
additional note, it is important to perform an effective allocation
of the trucks to the warehouse docks, taking into account the lay-
out that will be implemented. Thus, it is expected that the alloca-
tion of the trucks to the docks can be performed in order to
minimize the distance travelled in the warehouse to transport
 M. Horta et al. / Computers & Industrial Engineering 101 (2016) 1–9
the pallets from its warehouse locations to the truck that will
transport the goods to the stores. The overall future studies require
further the inclusion of uncertainty in data, so as to become more
realistic and close to daily operations.
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