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LOGISTICS AND SUPPLY CHAIN MANAGEMENT PROGRAM

Course:
WAREHOUSE ENGINEERING MANAGEMENT
Chapter 5: Warehouse operational principles

Lecturer: Assoc. Prof. Dr. Ho Thi Thu Hoa


Assoc. Prof. Dr Ho Thi Thu Hoa 1

Contents
1.Warehouse layout models
2.Order picking methods
3.Order picking operations

Assoc. Prof. Dr Ho Thi Thu Hoa 2

Assoc. Prof. Dr Ho Thi Thu Hoa 1


Learning objectives

Understand variety of warehouse layout

Apply methods of order picking

Know how to improve order picking efficiency

Apply order picking operations

Assoc. Prof. Dr Ho Thi Thu Hoa 3

References
1. Richards, G. (2014). Warehouse management: a complete guide to improving efficiency and
minimizing costs in the modern warehouse. Kogan Page Publishers. (Chapter 6,9)
2. Richards, G. (2018). Warehouse management: a complete guide to improving efficiency and
minimizing costs in the modern warehouse. Kogan Page Publishers.
3. Manzini, Ricardo. Warehousing in the Global Supply Chain. Springer: 2012
4. Tompkins, J. A., White, J. A., Bozer, Y. A., & Tanchoco, J. M. A. (2010). Facilities planning. John
Wiley & Sons (Chapter 6-10)
5. Alan Hrrison and et. (2014), Logistics management and strategy competing through the
supply chain (fifth edition), Pearson
6. Martin Christopher(2011), Logistics & Supply Chain Management (4th Edition), Prentice Hall
7. Arnold, Tony J. R., Chapman, S. N., Clive, L. M (2016), Introduction to Materials
Management, 7ed. Pearson: 2016.
8. http://www.roodbergen.com/warehouse/ (for practice)
Cited from MSc Mai Thuy Dung and MSc Nguyen Hoang Huy: Teaching materials for WAREHOUSE ENGINEERING
MANAGEMENT Assoc. Prof. Dr Ho Thi Thu Hoa 4

Assoc. Prof. Dr Ho Thi Thu Hoa 2


1. Warehouse layout
The areas to concentrate on are as follows

Gather as much data as possible and Put the health and safety of staff at the
analyse it. forefront of the design
 in order to retain a conscientious and motivated
Try to imagine the business in 5–10 workforce ensure that the facility has sufficient lighting
years’ time and build in flexibility. and ventilation.
 Provide ergonomic equipment.
Concentrate on the cubic capacity of
the building. Reduce the amount of movement required
within the warehouse.
Ensure the design is sympathetic to
the existing storage equipment and Try to standardize the packaging both for
MHE (if applicable). movement and storage.
Don’t forget the outside of the Understand the local building regulations and
building floor loading requirements.

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Data collection and analysis

•A survey by Cranfield University (Baker and Perotti


2008) indicated that
• 52% of the warehouse floor area is typically used for
storage
• 17 % for the pick/pack operation
• 16% for receiving and dispatch
• 7% for value-adding services
• and a further 7% for areas such as battery charging,
empty pallet storage and other uses
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• The main floor-space areas within the warehouse that need to be calculated are as
follows:
• receiving area;
• quarantine and inspection area;
• reserve storage area;
• carton-picking area;
• item-pick area;
• value-adding services area;
• packing area;
• despatch area;
• cross-dock area;
• empty pallet and packaging storage area;
• MHE charging areas;
• warehouse offices; and
• restrooms.

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 Space calculations

For example:

If we receive 20 vehicles per day, 26 pallets per load with a pallet size of 1.2 metres by 1.0 metres and it takes 45
minutes per load to unload and 30 minutes per load to check and we operate an eight-hour shift:
Pallet floor space = {round-up ((20 × 1.25) ÷ 8) × (26 × (1.2 × 1))}
= 4 × 31.2
= 124.8 square metres

 Storage space

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Rule-of-thumb formula

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Aisle width
• This is the distance between pallets in adjacent racks. To ensure safety we
need to calculate the distance between the pallets once they have been put
onto the racks.
• The aisle width is determined by the turning circle of the forklift truck and the
size of pallet being carried.

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Other space
• to park vehicles which are either collecting or delivering products;
• own fleet vehicles (if applicable);
• sufficient turning circle for the largest vehicle;
• waste storage and recycling areas;
• areas for weather resistant packaging;
• parking for staff and visitor cars; and
• gas or diesel storage tanks depending on the type of MHE utilized.

Assoc. Prof. Dr Ho Thi Thu Hoa 13

• The warehouse layout will very much depend on the size and shape of the
building, access to it, type of equipment utilized and the operation
envisaged.
• Each layout has its advantages and disadvantages.
• The U-flow design
• enables greater utilization of the loading bays but can result in congestion if both areas are
busy at the same time.
• It also makes security easier and access is via one side of the warehouse

• With a through-flow warehouse


• there are no issues with congestion
• but travel distances are increased and having doors on both sides of the warehouse requires
increased security and access either via two separate external gates or a perimeter road
around the outside of the warehouse.

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Figure 9.4 shows how receiving and despatch are on the same side of the building thus ensuring high dock
utilization and facilitating cross docking.

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A through-flow warehouse as depicted in Figure 9.5 provides a layout where the movement is in
straight lines and is more natural.
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Finding additional space
• When facing a shortage of space within the warehouse there are a
number of options available, namely:
• expanding the warehouse (1);
• renting additional space (2); and
• creating more space within the existing premises (3)

• If (2) or (3) are not available, a potential solution to increasing available space within
a warehouse is
• to reduce inventory levels.
• change the type of storage medium or mechanical handling equipment used. from single-deep to
double-deep racks, utilizing drive-in racking, narrow aisle racking or introducing articulated
forklift trucks which can operate in narrower aisles.
• reducing beam heights within the warehouse to accommodate smaller, full or part pallets
• moving from fixed locations to random locations.

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Warehouse layout models

• f is the expected distance traveled between storage location k and


the docks

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Warehouse layout models

Dedicated storage/ fixed slot storage a particular set of storage slots or locations
is assigned a specific product.
 a number of storage slots equal to maximum inventory level for the product
must be provided.
Randomized/ floating slot storage each unit of particular product is equally
likely to be retrieved as well as empty storage likely to be selected for storage.
The model is approached to determine the optimum dedicated storage layout
and rectilinear is assumed.
=> The warehouse layout problem involve to the assignment of products to
storage locations in the warehouse

Warehouse layout models

Notation:

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Warehouse layout models

• To minimize the total expected distance traveled as following


steps:

Example 10.21 page 575

Design a warehouse layout with four docks

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Example 10.21 page 575 Warehouse layout

Example 10.21 page 575 Warehouse layout

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2. Order picking methods

• What is Picking?
• Objectives of Order Picking
• Picking methods
• Improve order picking efficiency

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What is Picking?

• The process of converting products from the form in


which they are held in DCs to the form required by the
customer is known as order selection.
• Picking is essentially a short-hand descriptor for the
order selection process.
• There are different methods for picking, and a
combination of these methods can be used within a
single DC.

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What is Picking?
• The picking process includes selecting goods to fulfill customer orders.
• Personnel who fulfill orders travel through a facility to pick
goods and pull the requested quantity of each product
identified on a pick list.
• The pick list shows customers’ orders and may take the form
of a paper checklist, labels placed on cartons, a computer
display, or a voice-activated picking system .
• Once picked, the items may be labeled and put on a conveyor
system to be transferred to the shipping area or assembled
on a pallet or cart designated for a customer.

What is Picking?

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What is Picking?
• For many organizations, order picking is the most labor-intensive
and expensive distribution activity.
• This function requires:
• A great deal of travel throughout a distribution facility
• A great deal of handling individual cases or units within cases.
• It is important for this operation to be:
• productivity
• safety
• accuracy

What is Picking?
• In general, when an order is received, the locations of the products
required to fill that order are determined, and a list is generated to direct
the picker to locations within the DC where the products may be found.
• If an automated device is being used, it may bring the item to the order
picker.
• If picking is done using a computer, the software will evaluate the most
efficient route for picking the desired products.
• Replenishment operations is also important to picking operations, which
entails moving product from storage locations in a distribution facility to
designated pick areas.
• In some distribution operations, this might be a separate picking area.
Specialized order picking equipment is often required to retrieve product.
Replenishment equipment operators keep an adequate supply of product
in the pick positions/areas.

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What is Picking?

Picking area

Objectives of Order Picking


When picking customers’ orders, the objective is to present a full range
of stock in as small an area as possible without unnecessary
replenishment and congestion. The basics of effective order picking
include the following actions:

• Minimize movement
• Reduce order processing time
• Reduce ineffective time

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Objectives of Order Picking
• Reducing Movement Time
– Following are the methods of picking that are used to reduce movement time.
– One method frequently used to reduce movement when picking orders is to
use popularity storage. In most product ranges, 20% provides approximately
between 60% and 90% of the throughput (most often 20:80). This ratio is
used to concentrate together the fast movers and, thus, reduce
walking/movement as shown below.

Objectives of Order Picking


• Reducing Movement Time
–Movement can be reduced in order picking by consolidating the “fast” movers
together.
–One system often used in DCs is to have a separate forward stock where part or all of
a product range is duplicated in a separate picking area. If there is a separate forward
stock, the advantage is a smaller picking area, thus, less movement. A smaller
forward stock area can be used for picking in which all or part of a product range is
duplicated. The advantage of this is a smaller picking area resulting in less
movement, but the disadvantage is more difficult control and double handling in
moving stock from reserve to forward storage.
–The decision to have a separate forward picking area is based on a tradeoff in cost
between the cost of picking from total stock and the cost of picking from a smaller,
but representative, area, plus the cost of moving items from the bulk stock to a
separate picking area. A reserve stock, which is separated from a forward stock

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Picking methods
– paper pick lists;
– pick by label;
– pick by voice;
– barcode scanning;
– radio frequency identification;
– pick by light/pick to light;
– put to light;
– automated picking.

Paper pick lists


– A paper pick list will normally detail the order number, location, product code,
description and quantity to be picked.
– If utilizing a WMS, each product line will be shown in sequence, enabling the
picker to travel the most efficient way around the warehouse and ending up
as close to the despatch bay as possible
– The operator is however at liberty to choose a different route if it is felt that it
is more direct.
– The fastest-moving items should be placed close to the despatch area to
minimize travel

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Pick by labels
– In this system, pick lists are a series of labels on a sheet, which are printed in
pick order.
– The picker attaches a label to each item picked and returns any unused labels
to the supervisor’s office.
– Any discrepancies are checked immediately and additional labels printed if the
stock is available elsewhere in the warehouse.

Pick by voice
– Operators are issued with a headset and a microphone together with a small
terminal that is attached to a belt or can be worn on the wrist.
– The WMS sends messages to the computer via radio frequency (RF)
transmissions, utilizing transmitters installed throughout the warehouse,
and these messages are converted into voice commands.
– The operator also uses voice to communicate back to the system.

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Pick by voice
– The list of benefits of pick by voice

● increased accuracy;
● increased productivity;
● reduction in paper usage;
● reduction in errors through elimination of re-keying data;
● improved safety through hands- and eyes-free operation;
● reduction in damage;
● real-time stock updates leading to fast and accurate replenishment;
● real-time updates regarding potential shortages;
● increased operator time on the warehouse floor;
● reduced training times;
● multilingual, accommodating a diverse workforce;
● easy to integrate with other systems;
● potential reduction in employee turnover; and
● normally a quick ROI.

Pick by barcode scanning


– The list of benefits of pick by voice

● increased accuracy;
● increased productivity;
● reduction in paper usage;
● reduction in errors through elimination of re-keying data;
● improved safety through hands- and eyes-free operation;
● reduction in damage;
● real-time stock updates leading to fast and accurate replenishment;
● real-time updates regarding potential shortages;
● increased operator time on the warehouse floor;
● reduced training times;
● multilingual, accommodating a diverse workforce;
● easy to integrate with other systems;
● potential reduction in employee turnover; and
● normally a quick ROI.

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Pick by radio frequency identification
– RFID is a means of uniquely identifying an item using radio waves.
– Data is exchanged between tags and readers and depending on the
frequency, may or may not require line of sight.
– Common uses in today’s world include library books, toll passes and access ID
cards.

Pick by light/pick to light


– Pick to light or pick by light uses light-indicator,
LED or LCD modules mounted to shelving, flow
racks, pallet racks or other storage locations.
– This system tends to be used in conjunction with
zone picking.
– To begin the process an operator scans a barcode
on an arriving pick tote or shipping carton which
denotes the next order number to be picked.
– This communicates to the system that the
operator is ready to pick.
– The system then sends a message to the zone in
which the operator is stationed and all the pick
locations for that particular order light up at once

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Automated picking
• Automated storage and retrieval systems (ASRS)
bringexceptional uptime, improved safety and
multiplied productivity to warehouses. This
technology improves material handling, order
preparation and dispatch, and can be fully
tailored to unique specifications.

Benefits of automated storage systems:


• Enables high throughput
• Ideal for high density warehouses
• Designed for pallets, boxes and other items
• Economy of labour
• Absolute load safety and security
• Complete warehouse management with WMS

Improve order picking efficiency

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Improve order picking efficiency

Improve order picking efficiency

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Order Picking Principles

• Task Interleaving & Task Management (combine

processes of picking and storing, etc.)

• Bulk store fast moving items (easy picking &

replenishment)

• Combine pick tickets (Batch Processing)

• Item storage as per ABC Analysis

Picking Paths
• Travel time is a waste
• Reduce total travel time
• Sequence of the picks
• It matters!
• Identify the shortest
route
• Help picker visualize

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The General Problem
• main aisle we refer to an aisle between the
front and rear end of the warehouse, going
through all blocks
• front aisle and the rear aisle do not contain
items, but can be used for changing aisles.
• cross aisle can be used to go from one aisle
to the next or from one block to the next.
• Order pickers are assumed to be able to
traverse the aisles in both directions and to
change direction within the aisles
• Given that the order picker has to collect a
number of products in specified quantities
at known locations, in what sequence
should the order picker visit these locations
in order to minimize the distance traveled?

S-Shape Heuristic
• any aisle containing at least one item is
traversed through the entire length. Aisles
where nothing has to be picked are skipped.
• The order picking route starts at the depot. It
goes to the front of the main aisle closest to the
depot, that contains at least one item (1). This
main aisle is traversed up to and including the
block farthest from the depot, that contains at
least one item (2).
• If the current block contains at least one item:
Go to the left most aisle containing items or go
to the right most aisle containing items,
whichever is the closest (3); go from one aisle
to the next and traverse any aisle containing
items entirely; after picking the last item,
return to the front of the block (4). If this block
contains no items: Traverse the aisle of this
block, that is closest to the current position.
Repeat this procedure for all blocks until the
block closest to the depot has been considered
(5). Finally, return to the depot.

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Example
• Find the shortest route of the following
warehouse using the S-shape heuristic

Largest Gap Heuristic


• Similar to the S-shape heuristic, the order picking route starts at the depot; it goes to the front of the main
aisle closest to the depot, that contains at least one item; traverses this main aisle up to and including the
block farthest from the depot that contains at least one item (1).
• On traversing the cross aisle (which is actually the rear aisle in this), each aisle is entered as far as the ‘largest
gap’ and left from the same side that it was entered (2). A gap represents the distance between any two
adjacent items, or between a cross aisle and the nearest item. Thus, the largest gap is the part of the aisle
that is not traversed.
• The last aisle of the block is traversed entirely, by which we arrive in the next cross aisle (3). This cross aisle is
traversed, while visiting the aisles of the blocks on both sides of the cross aisle up to the largest gap. First the
aisles on one side of the cross aisle are visited (4) and thereafter the aisles on the other side (5). One aisle is
again traversed entirely to reach the next cross aisle (6). This may be either the left or the right most aisle
containing items, depending on which of the two gives the shortest travel distance within the cross aisle.
• This process is repeated for all blocks containing items. If a block does not contain items, then the aisle of this
block, that is closest to the current position is traversed entirely. After considering the last block, return to the
depot (7).

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Example

Combined Heuristic
• This heuristic creates order picking routes
that visit every aisle, that contains items,
exactly once. The aisles of each block are
visited sequentially, either from left to
right or from right to left.
• Similar to the S-shape and largest gap
heuristics, the order picking route starts
at the depot; it goes to the front of the
main aisle closest to the depot, that
contains at least one item; traverses this
main aisle up to and including the block
farthest from the depot that contains at
least one item.

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Combined Heuristic
• For each block we perform a small dynamic programming algorithm.
• Two states:
 the orderpicker is at the front of the block
 the orderpicker is at the rear of the block.
• 6 transitions:
1. go from the current aisle to the next aisle along the front of the block and traverse this aisle entirely,
ending up at the rear of the block,
2. go from the current aisle to the next aisle along the rear of the block and traverse this aisle entirely,
ending up at the front of the block,
3. go from the current aisle to the next along the front of the block and do not enter this aisle at all,
4. go from the current aisle to the next along the rear of the block and do not enter this aisle at all,
5. go from the current aisle to the next aisle along the front of the block and traverse this aisle up to the
item farthest from the front and return to the front,
6. go from the current aisle to the next aisle along the rear of the block and traverse this aisle up to the
item farthest from the rear and return to the rear.

Combined Heuristic
• Clearly, transitions (3) and (4) are only allowed if the aisle does not contain any items. The cost of each
transition is equal to the travel time needed for the distance in the transition.
• The following figure depicts the 6 transitions. The current aisle is aisle j, the next aisle is aisle j+1. The rear
end of aisle j is denoted by aj and the front end by bj.

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Example
• Find the shortest route of the following
warehouse using the combined heuristic

Aisle-by-Aisle Heuristic
• every main aisle is visited once. The
order pickers starts at the depot and
goes to the left most aisle containing
items. All items in this main aisle are
picked and a cross aisle is chosen to
proceed to the next main aisle. Again
all items in this main aisle are picked
and the order pickers proceeds to the
next main aisle. The aisle-by-aisle
heuristic determines which cross
aisles to use to go from one aisle to
the next in such a way that the
distances traveled are minimized

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Optimal Algorithm

• This algorithm is described to find


shortest order picking routes in a
warehouse with three possibilities
for changing aisles: at the front, at
the rear and somewhere in
between. This algorithm uses
dynamic programming to solve
the problem

3. Order Picking Operations

 Block stacking
 Deep lane storage
 Pallet rack

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Block stacking
Block stacking involves the storage of unit loads in stacks within storage rows.
Important questions:
How deep the storage rows should be?
Block stacking is used to achieve high space utilization at a low investment
cost
The design of block stacking is characterized by:
• x: the depth of storage row
• y: the number of storage rows required for a given product lot.
• z: the height of the stack
x, y, z are integer variable

Other factors may influence the optimum row deep:


Lot sizes, load dimensions, aisle widths, row cleareances, allowable stacking
heights, storage/ retrieval times, storage/ retrieval distribution

Block stacking
Assumptions:
- A storage row that has been assigned to a product will be
immediately assigned to another product as soon as the row
becomes empty

- Randomly assigned rather than dedicated to a given product

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Basic block stacking model
SBS = average amount of floor space required
during the life of a storage lot
Q = size of a storage lot, measured in unit loads
W = width of a unit load
c = clearance between adjacent storage rows
L = length or depth of a unit load
A = width of the storage aisle
z = storage height or levels of storage, measured
in unit loads
x = depth of a storage row, measured in unit
loads
y = integer number of storage rows required to
accommodate Q unit load, given x and z =
smallest integer, greater than or equal to Q/xz =
[Q/xz] of a storage row, measured in unit loads
= average number of storage rows required over
the life of a storage lot.

Average amount of floor space required during the life of a storage lot will equal the
product of the average amount of floor space required for a storage row and the
average number of storage row

Assuming a uniform withdrawal of unit loads, the average number of storage rows is
given by

Since the sum of the integers 1 through n-1 equals n(n-1)/2, the  is given by

Hence the SBS is given

The stacking design problem can be state as follows: determine integer value of x that
minimize SBS

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Example 10.23

The number of storage row with x=2 and z=3 is

65

Example 10.23

66

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Example 10.23

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Continuous Approximation of Block Stacking

• For a large value of Q, we can develop a continuous approxiamtion to (demoted S )


• Let y= Q/xz, we have

• Take derivative of S with respect to x, solving for x gives a continuation approximation to the
optimum row depth

• Reading example 10.24

68

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Example 10.24
Q=500 unit loads, A=156”, z=3, L=48”
Using a continuous approximation to determine the optimum row depth
156(500)
x = = 16.457
2(48)(3)
(16 or 17 should be close to being the optimum)
x=16 => Q= 503
x=17 => Q=565 – (it should be used)

Suppose warehouse has available rows that are 10 and 25 deep which should
be chosen for for the 500 unit loads?

Let x=10 S =1711.46 ft


Let x=25 S =1701.04 ft

Therefore, It is better to store product in 25-deep rows.

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Multiple Row Depths

• What if multiple depths are allowed?


• Should the lot be split into two or more batchs?
• With each batch stored in a row of optimum depth for the batch?
Or
• If the products are to be stored in a warehouse that has defined row
depths, how should product be assigned over the inventory of empty
row of varying depths?

70

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Multiple Row Depths

• What if multiple depths are allowed?


• Should the lot be split into two or more batchs?
• With each batch stored in a row of optimum depth for the batch?
Or
• If the products are to be stored in a warehouse that has defined row
depths, how should product be assigned over the inventory of empty
row of varying depths?

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Multiple Row Depths

• Let , are empty rows pf depths. We completely fill all −deep


rows before storing product in the -deep rows
• y , y are the number of and -deep rows
• Q and Q are unit loads to be stored in and -deep rows

The average amount of floor space required to store Q

72

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Multiple Row Depths

To minimize S given value of , . We can enumerate over y

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Example 10.25
Reading example 10.25 page 588 – 589
Sumarize:
Q= 500 unit loads, =10 deep, =20 deep, w=42”,
L=48”, c=8”, A=13 feet wide, three high
Solving a block stacking problem with two row depths

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Example 10.25
Solution 1:
x = 20, x = 10, y = 5, z = 3, 20 deep
rows completely filled => Q = 10 5 3 =
300 unit loads. => Q = Q − Q = 500-
300=200 unit loads
S
20 48 + 0.5 12 13 5+1
= 42 + 8
2 144
= 1,081.25 ft
Q = 200 unit loads => S = 5(42 +
.
8)[ = 1,802.08 ft

S = 7(42 +
. [ ( )
8)[ =
( )( )
745.93 ft

S = 1,667.96 ft 75

Example 10.25
Solution 2: excel solver

76

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Safety Sock

A new shipment of product will arrive before the previous shipment is


fully depleted => Such a situation produces safety stock

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Safety Sock

Read example 10.26 page 593-594

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Approximately with Safety Sock

When Q is very large and safety stock (s) exists, a continuous


approximately can be used

We substitute for y, so average amount of space (S ) and

optimum row depth (x ) are

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Continuous Approximately with Safety Sock

Read example 10.27 page 595

80

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https://www.roodbergen.com/warehouse/frames.htm

Assoc. Prof. Dr Ho Thi Thu Hoa 81

Review – Next lesson preparation

1. Mindmap
2. https://create.kahoot.it/my-
library/kahoots/2d48a4b3-d15f-4c2b-
8547-041e149ff683 (check for lesson
review)
3. Pin code for Kahoot (//kahoot.it)
4. Chapter 6: Preparation

Assoc. Prof. Dr Ho Thi Thu Hoa 82

Assoc. Prof. Dr Ho Thi Thu Hoa 41

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