Algorithms for dynamic forward area allocation in a warehouse

Official URL: http://risc01.sabanciuniv.edu/record=b1083692 (Table of Contents)

This thesis consists of two major parts. The first part is the presentation of two dynamic algorithms and the second part is the performance analysis of these algorithms using a real order data. In this study, two algorithms, Slot-based Dynamic Algorithm and Order-based Dynamic Algorithm are developed for dynamic forward area allocation. Both algorithms are based on the idea of reassignment of most profitable items to the forward pick area. For Slot-based Algorithm, the profitable item is selected whenever slot becomes empty. This decision criterion is changed in Order-based Algorithm and becomes the end of definite order cycle. This thesis attempts to determine savings gained by implementing two algorithms in various warehouse settings. Instead of savings, number of forward picks, replenishments between reserve and forward areas and finally number of stock outs are analyzed as performance measures. Earlier research focused mainly on the relocation of items only in the forward area according to the changing item popularity. On the other hand, our study addresses the issue of reassignment of items from reserve to forward slots in a volatile market environment. Additionally, the forward area is assumed to be a physical space consisting of slots, which makes our proposed algorithms convenient for real life applications. Our study provides interesting insights in order to increase warehouse efficiency. We observe the advantages and disadvantages of both algorithms in different warehouse settings. We believe that these insights help managers to select the robust methods for creating forward area allocations.