A computerized system for storage location assignment in third party warehouses

The storage location of products in a warehouse has important implications for storage and order picking times, and hence for overall warehouse effici ency. Most analytic models in the literature address traditional warehouses where material flows from receiving to storage and from storage to shipmen t. Increasingly, today's warehouses are experiencing more complex flows due to value-added transformations, as warehouses seek to become more than cos t centers that provide temporary storage and product aggregation. In this p aper, we present a heuristic method for assigning products to storage locat ions in third party warehouses that, in addition to providing storage, also provide assembly and kitting operations. This method is demonstrated via a case study and an associated computational system that supports the analys t in storage location planning. Significance: This paper presents a heuristic approach and the associated c omputer-based system to assign products to locations in a warehouse with va lue-added transactions. Such a system would assist managers of third party warehouses to improve the effective use of storage space and the response t imes.