Abstract
We study a real-world production warehousing case, where the company always faces the challenge to find available space for its products and to manage the items in the warehouse. To resolve the problem, an integrated strategy that combines warehouse layout with the capacitated lot-sizing problem is presented, which have been traditionally treated separately in the existing literature. We develop a mixed integer linear programming model to formulate the integrated optimization problem with the objective of minimizing the total cost of production and warehouse operations. The problem with real data is a large-scale instance that is beyond the capability of optimization solvers. A novel Lagrangian relax-and-fix heuristic approach and its variants are proposed to solve the large-scale problem. The preliminary numerical results from the heuristic approaches are reported.
Highlights
The warehouse layout problem is one of the key issues in warehouse management, which involves all stages of a supply chain
The capacitated lot-sizing problem is a medium-term production planning, which decides how much to produce for each product so that the total cost of production, setup, and inventory is minimized
We propose an integrated strategy to combine a storage location assignment problem with a capacitated lot-sizing planning, which is motivated by a real-world case
Summary
The warehouse layout problem is one of the key issues in warehouse management, which involves all stages of a supply chain. The model presented in this paper combines a storage location assignment problem with dynamic inventory, and takes into account production planning. This paper develops an integrated strategy that combines a dedicated storage location assignment with the capacitated lot-sizing problem into a single mathematical model that minimize the total cost of travel, reserved storage space, handling, production, inventory holding, and setup costs. Notations The parameters of the proposed model include the number of items, storage locations, the planning horizon, forecasted demand, as well as the costs of production, setup, storage, handling, travel costs, and reservation cost. The notations for those parameters are defined as the following. Note: Each location can only hold one unit at a time
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