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FACPLAD Notes
Definition of Storage
Storage is an essential function in a
warehouse.
It refers to the physical containment of
products
Assignment of items to locations
Definition of Terms
Throughput - a measure of the activity or
the dynamic nature of storage. It used to
measure the number of storages and
retrievals performed per time period.
Size - Refers to the storage space needed.
Size of Storage
Requirement
No. of Storage
Locations Required
Storage Location
Policy
Storage Location Policies
Dedicated Storage
Randomized Storage
Class-based Dedicated Storage
Shared Storage
Dedicated Storage
Location Policy
Referred to as fixed slot storage.
Involves that assignment of specific
Product No. of
locations
1 8
2 40
3 12
4 12
TOTAL 72
Sizing on the Basis
of Service Levels
Pr(no shortages) F (Q )
j1 j j
Min Q
j 1
j
s.t . F (Q ) P
j1 j j
Q 0 for all j
j
Mathematical Model #2
Max F (Q ) j1 j j
s.t . Q S
j1
j
Q 0 for all j
j
Problem 3
A storage system is to be designed for storing three
products: 1, 2, and 3. The number of storage slots
required on any given day is a Poisson distributed
random variable. The storage requirements for the
three products are statistically independent. The
expected values of the daily space requirements are
2, 3, and 4. It is desired to minimize the total space
capacity, subject to the probability of at least one
shortage occurring being no greater than 0.05.
Formulate the mathematical model for this problem.
Determine the optimal number of storage locations
for each product and the probability that there will
be no shortages.
Mathematical Model
Min z Q1 Q2 Q3
s.t.
𝑃 ( 𝑥1 ≤ 𝑄 1 ) ∗ 𝑃 ( 𝑥 2 ≤ 𝑄 2 ) ∗ 𝑃 ( 𝑥 3 ≤ 𝑄 3 )≥ 0.95
Qj 0 j 1,2,3
Qj
e x
Where: P( x j Q j )
x 0 x!
Solution
This problem can be solved using dynamic
programming or complete enumeration.
Stage: Product
State: Service Level
Decision: No. of slots to be assigned to each
product
The allocation of 20 slots that yields the
𝑀𝑎𝑥 𝑧 = 𝑃 ( 𝑥1 ≤ 𝑄 1 ) ∗ 𝑃 ( 𝑥 2 ≤ 𝑄 2 ) ∗ 𝑃 ( 𝑥 3 ≤ 𝑄 3 )
s.t. Q1 Q2 Q3 15
Qj 0 j 1,2,3
Qj
e x
Where: P( x j Q j )
x 0 x!
Solution
This problem can be solved using dynamic
programming or complete enumeration.
Stage: Product
State: Available slots
Decision: No. of slots to be assigned to each
product
Solution
The allocation of 15 slots that yields the
greatest probability of no space shortages
will be 4, 5 and 6 for products 1, 2, and 3,
respectively.
The probability of no shortages is (0.9473)
(0.9161)(0.8893) or 0.7718.
Solution
Min TC Q , , Q
1 n
C0Q j C1,t min d t , j , Q j C2,t max d t , j Q j ,0
n T
j 1 t 1
Notations
Where: Qj= “owned” storage capacity for product j
T = length of the planning horizon in time periods
dt,j= storage space required for product j during period t
TC(Q1,...,Qn) = total cost over the planning horizon as a
function of the set of storage capacities
C0 = discounted present worth cost per unit storage
capacity owned during the planning horizon of T time periods
C1,t = discounted present worth cost per unit stored in
owned space during time period t
C2,t = discounted present worth cost per unit stored in
leased space or per unit of space shortage during time period
t
Notations
Min(dt,j,Qj) = dt,j if dt,j< Qj
= Qj if dt,j > Qj
Max(dt,j- Qj, 0) = 0 if dt,j- Qj< 0
= dt,j- Qj if dt,j- Qj > 0
Solution Procedures
C' C /(C C )
0 2 1
Let
1. Sequence in decreasing order the
demands for space.
2. Sum the demand frequencies over
the sequence.
3. When the partial sum is first equal to
or greater than C’, stop; the optimum
capacity equals that demand level.
Problem 5
Suppose that only one product is being
stored in the warehouse. Let T = 10 periods,
C0 = $20 per space, C1,t = $1 per space
period, C2,t = $4 per space period, and the
storage requirements over the planning
horizon equals 4, 6, 8, 10, 9, 8 7, 6,5, and 4
for time periods 1 to 10, respectively. The
ordered demands, frequencies, and partial
sum are given in table below.
Solution
Ordered Frequency Partial Sum
Demand
10 1 1 < 6.67
9 1 2 < 6.67
8 2 4 < 6.67 C’ = C0/(C2 – C1)
7 1 5 < 6.67 = 20/(4 – 1) = 6.67
6 2 7 > 6.67
5 1 8 > 6.67
4 2 10 > 6.67
Min E TC Q , , Q 1 n
T T
C0Q j C1 d t , j p (d t , j ) Q j p (d t , j ) C2 d t , j Q j p (d t , j )
n
j 1
t 1
d t , j Q j d t , j Q j t 1
d t , j Q j
Notations
Where:
E[TC(Q1,...,Qj)] = expected total cost over the planning horizon
as a function of the set of storage capacities
p(dt,j) = probability mass function for the storage requirement
for product j during period t
C1 = cost per unit stored n owned space per time period
C2 = cost per unit stored in leased space or per unit space
shortage per time period
Problem 6
Suppose a warehouse store only one product.
Let C0 = 25, C1 = 2, C2 =6. The probability
distribution of demand is given in the table
below. Find the number of storage slots
using dedicated storage.
Storage 1 2 3 4 5 6 7 8 9 10
Demand
10 0.30 0.30 0.30 0.30 0.30 - - - - -
15 0.40 0.40 0.40 0.40 0.40 0.20 0.20 0.20 0.20 0.20
20 0.30 0.30 0.30 0.30 0.30 0.30 0.30 0.30 0.30 0.30
25 - - - - - 0.50 0.50 0.50 0.50 0.50
Solution
C’ = C0/(C2 – C1)
= 25/(6 – 2) = 6.25
Storage 1 2 3 4 5 6 7 8 9 10 Sum
Demand
10 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 10.0
15 0.70 0.70 0.70 0.70 0.70 1.00 1.00 1.00 1.00 1.00 8.5
20 0.30 0.30 0.30 0.30 0.30 0.80 0.80 0.80 0.80 0.80 5.5
25 - - - - - 0.50 0.50 0.50 0.50 0.50 2.5
T
Min f ( x ) p t x
m n s
j
S
i ,j i ,k j ,k
i 1 j 1 k 1
j
s.t . x 1 k 1, , s
j 1
j ,k
x S
k 1
j ,k j
j 1, , n
S S S
1 2 n
where m
t p t
k
i 1
i i ,k
Solution Procedures
Assign product 1 to the
S1 storage locations
having the smallest tk values; assign
product 2 to the S2 unassigned storage
locations having the next-lowest tk values;
and so on.
Problem 7
Consider a situation involving six storage locations, two I/O
points, and three products. Consider the storage rack face
shown in the figure. A lift truck travels along the aisle,
stops, and raises and lowers its forks to store and retrieve
unit loads of the product at the indicated (*) locations. The
times required to travel between the I/O points and
storage/retrieval locations are given in the table below. For
example, m = 2, n = 3, and s = 6. Also, we assume that pi,j
= 0.5 for i, j combinations (i.e., the two I/O points are
equally likely to be used for travel to/from the 6
storage/retrieval locations for all products). The number of
storage and retrieval requests to be performed per hour for
the three products are: T1 = 4, T2 = 6, and T3 = 3. Also, the
number of storage positions required for each product are:
S1 = 2 slots, S2 = 1 slot, and S3 = 3 slots.
Example (Cont.)
4 5 6
* * *
1 2 3
I/O1 * * * * * I/O2
Travel Times
i k tik (sec.) i k tik (sec.)
1 1 5 2 1 45
1 2 15 2 2 25
1 3 25 2 3 5
1 4 20 2 4 60
1 5 30 2 5 40
1 6 40 2 6 20
Mathematical Model
Min f ( x) 50 x11 40 x12 3013 80 x14 70 x15 60 x16
150 x21 120 x22 90 x23 240 x24 210 x25 180 x26
25 x31 20 x32 15 x33 40 x34 35 x35 30 x36
3
s.t. x jk 1 k 1, ,6
j 1
6
x1k 2
6
x3k 3
k 1 k 1
6
x 2k 1 x jk (1,0) for all j and k
k 1
Solution
1 2 3 4 5 6
1 50 40 30 80 70 60 2
* *
3 25 20 15 40 35 30 3
* * *
1 1 1 1 1 1
T1 4 T2 6 T3 3
2 6 1
S1 2 S2 1 S3 3
Therefore, we assign location 3 to product since it has lowest value of t k
of 90. We assigned locations 2 and 1 to product 1. Finally, we assign
locations 6, 5, and 4 to product 3.
Randomized Storage
Location Policy
Also called as floating slot storage.
Allows the storage location for a particular
product to change or “float” over time.
When a load arrives for storage, it is placed in
the “closest” open feasible location; retrievals
occur on a first-in, first-out basis.
If more than one I/O point, the storage location
selected is the one “closest” to the input point
through which the unit load enters the storage
facility.
Randomized Storage
Location Policy
It is assumed that each empty storage slot is
equally likely to be chosen for storage when a
storage operation is performed.
It is also assumed that each unit of a
k
k
I/O
k
Problem 13
Consider a warehouse of dimension 200 ft. x
150 ft. having a single dock. Randomized
storage is to be used. The storage space
required will be either 18,000 or 27,000
square feet. Assume that item movement is
equally likely to occur between the dock and
any point in the storage region. Travel is
rectilinear.
Solution
I/O 200 ft
150 ft.
Solution
A = (1/2)(2k)(k) = k2 0 < k < 100
A + = 200k – 10000 100 < k < 150
= 200 (k – 100)
= (1/2)(200)(100)
A = 30000 – (250 – k)2 150 < k < 250
Solution
Solving for K
Area Triangle Pentagon Hexagon
18,000 134.16 140.00 140.46
27000 164.32 185.00 195.23