Optimisation of stock keeping unit placement in a retail distribution centre

CITATION: Van Heerden, S. A. & Van Vuuren, J. H. 2018. Optimisation of stock keeping unit placement in a retail distribution centre. South African Journal of Industrial Engineering, 29(2):74-91, doi:10.7166/29-2-1867.The original publication is available at http://sajie.journals.ac.zaENGLISH ABSTRACT: The retail problem of slotting refers to the assignment of stock keeping units (SKUs) to the available storage locations in a distribution centre (DC). Generally, the expected total distance travelled by stock pickers during an order consolidation and the resulting level of congestion experienced within aisle racking are common considerations when making these assignments. These criteria give rise to a bi-objective optimisation model with the aim of identifying multiple stock setups that achieve acceptable trade-offs between minimising the criteria on expectation. A mathematical framework is established in this paper, based on these two criteria, for evaluating the effectiveness of a given stock setup. In the framework, a stock picker’s movement between various storage locations is modelled as a Markov chain in order to quantify his or her expected travel distance, while a closed queuing network model is used to devise a suitable measure of congestion. This optimisation model framework forms the basis of a flexible decision support system (DSS) for the purpose of discovering high-quality stock assignment trade-off solutions for inventory managers. The DSS is applied to a special case study involving data from a real DC, and the desirability of the recommended stock configurations is compared with that currently implemented within the DC.AFRIKAANSE OPSOMMING: Die kleinhandelprobleem van die plasing van voorraadhoudings-eenhede (VHEs) verwys na die toewysing van VHEs aan beskikbare posisies in ʼn verspreidingsentrum (VS). Die verwagte totale afstand deur ʼn voorraadkonsolideerder afgelê en die gevolglike verwagte vlak van opeenhoping wat deur hierdie konsolideerders in die roetes van die VS ondervind word, is twee populêre plasingskriteria. Hierdie kriteria gee aanleiding tot ʼn tweedoelige optimeringsbenadering, waarvolgens verskeie voorraadplasings gevind kan word met aanvaarbare kompromieë tussen die kriteria. ʼn Wiskundige raamwerk wat op hierdie twee plasingskriteria berus word in hierdie artikel voorgestel waarvolgens die doeltreffendheid van ʼn gegewe voorraadopset in ʼn VS gemeet kan word. In hierdie raamwerk word die beweging van ʼn voorraadkonsolideerder tussen verskillende VHE-liggings as ʼn Markov-ketting gemodelleer om sodoende sy of haar verwagte reisafstand te skat, terwyl ʼn geslotetou netwerkmodel gebruik word as ʼn opeenhopingsmaatstaf. Hierdie tweedoelige raamwerk dien as basis van ʼn besluitsteunstelsel (BSS) vir die bepaling van goeie voorraadplasings in ʼn VS. Die BSS word toegepas op ʼn spesiale gevallestudie wat op data van ʼn werklike VS gebaseer is, en die geskiktheid van die aanbevelings in terme van voorraadplasings deur die BSS word vergelyk met die huidige voorraadopset in die VS.http://sajie.journals.ac.za/pub/article/view/1867Publisher's versio