ECONOMIC TRADEOFFS IN SIZING WAREHOUSE RESERVE STORAGE AREA

Warehouses, generally the conventional type, have separate reserve storage and active pick areas. The reserve storage area stocks the buffer inventory and facilitates the replenishment of inventory in the active pick area. An important but largely unadressed warehouse design issue is what should be the size of the reserve storage area relative to the active pick area. The relative sizing of the reserve storage area is influenced by economic issues such as the storage cost per cubic foot of space and the cost of replenishment of inventory in the active pick area. The relative sizing problem is formulated for a warehouse with dedicated linear shelving and dual-command picking discipline. The optimal partition of the warehouse layout is then obtained from the stochastic approximation of the problem. The significance of sizing the reserve storage area arises from its impact on the order-picking cost, a major operational cost component in warehouses. © 1990.