Product Allocation Planning with Handling Constraints : A Case Study Analysis

The storage policy has a tremendous impact on the efficiency of order-picking operations, which can account for up to 50% of operating costs. The coronavirus pandemic has reinforced the importance of managers making the right operational decisions, namely regarding the definition of the storage policy. It is therefore important to consider handling constraints. This article is inspired by a Portuguese retail company and it considers two handling constraints: weight and shape. We define the location of products by using a zero-one quadratic assignment model. In this model, in addition to the demand and similarity, we considered the weight and shape of the products. We used both weight and shape parameters to set products with similar shapes together, placing aside products with odd shapes. Our analysis shows that the inclusion of the shape and weight into the problem improved the current operations. We found that our method allowed for a reduction of up to 24% in the picking distance, a percentage higher than the one that only considers weight constraints. The inclusion of the shape parameter into the study enabled the company to increase the flow and efficiency of the order-picking operations. Thus, it can be an asset for other warehouses