Abstract
Resource planning in service industries is a difficult task and quite different from resource planning in manufacturing. Revenue management is one concept used in service industries when capacity and inventory are challenging to identify. In this study, the company case study provides chilled storage areas for customers. Different products are served and service charging is calculated based on the product’s weight and storing time. Currently, the target revenue cannot be achieved. This study presents the application of revenue management in chilled storage area allocation. From a previous study, there were four classes of products based on their importance level as A, B, C and D. Among all classes, the cost of under and overestimating demand was calculated for setting up the area allocation by following the concept of revenue management. Monte Carlo simulation was applied to simulate the existing and improved systems. The simulation results indicated that the average daily revenue could be improved when the storage area allocated to the lowest priority class (class D) was limited to be equal to the average daily demand of class D. Applying the proposed policy can help in increasing yearly revenue by approximately 73,638.75 Thai Baht. Finally, the implementation of the proposed procedure was discussed under the concept of Logistics 4.0.
Highlights
Warehousing is an activity in supply chain and product distribution
The company in the present case study provides a chilled storage warehouse for agricultural products such as vegetables, fruits, flowers, juice, etc., in which 280 pallets can be stocked in this chilled storage warehouse
The company calculates the service charge based on weights and storage duration without considering appearance and volume of products in which the service charge for the first week of storage is 1 Baht per kilogram and the service charge for the week until the last week of storage is reduced to 0.5 Baht per kilogram
Summary
Warehousing is an activity in supply chain and product distribution. Some companies have their own warehouses, but some of them use logistics service providers (LSPs) to handle activities occurring in warehouses, including receiving, storing, picking and shipping. A chilled storage warehouse is a service provided by LSPs because owning this type of warehouse is costly due to controlling temperature, leading to high energy costs, so many manufacturers outsource this activity to thirdparty logistics providers (3PLs). The company in the present case study provides chilled storage warehouses. This company cannot achieve its revenue target for this service due to inefficient procedures for allocating storage areas. When other high-revenue generating products arrive, there is no space to store them
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