Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
4959314 | European Journal of Operational Research | 2018 | 51 Pages |
Abstract
We consider the problem of assigning stockkeeping units to distribution centers (DCs) belonging to different DC types of a retail network, e.g., central, regional, and local DCs. The problem is motivated by the real situation of a retail company and solved by an MIP solution approach. The MIP model reflects the interdependencies between inbound transportation, outbound transportation and instore logistics as well as capital tied up in inventories and differences in picking costs between the warehouses. A novel solution approach is developed and applied to a real-life case of a leading European grocery retail chain. The application of the new approach results in cost savings of 6% of total operational costs compared to the present assignment. These savings amount to several million euros per year. In-depth analyses of the results and sensitivity analyses provide insights into the solution structure and the major related issues.
Related Topics
Physical Sciences and Engineering
Computer Science
Computer Science (General)
Authors
Andreas Holzapfel, Heinrich Kuhn, Michael G. Sternbeck,