Design for Warehouse with Product Flow Type Allocation using Linear Programming: A Case Study in a Textile Industry

Abstract

Sari Warna Co. Ltd, a company engaged in the textile industry, is experiencing problems in the allocation and placement of goods in the warehouse. During this time the company has not implemented the product flow type allocation and product placement to the respective products resulting in a high total material handling cost. Therefore, this study aimed to determine the allocation and placement of goods in the warehouse corresponding to product flow type with minimal total material handling cost. This research is a quantitative research based on the theory of storage and warehouse that uses a mathematical model of optimization problem solving using mathematical optimization model approach belongs to Heragu (2005), aided by software LINGO 11.0 in the calculation of the optimization model. Results obtained from this study is the proportion of the distribution for each functional area is the area of cross-docking at 0.0734, the reserve area at 0.1894, and the forward area at 0.7372. The allocation of product flow type 1 is 5 products, the product flow type 2 is 9 products, the product flow type 3 is 2 products, and the product flow type 4 is 6 products. The optimal total material handling cost by using this mathematical model equal to Rp43.079.510 while it is equal to Rp 49.869.728 by using the company’s existing method. It saves Rp6.790.218 for the total material handling cost. Thus, all of the products can be allocated in accordance with the product flow type with minimal total material handling cost.