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Application of the Cube-Per-Order Index Rule for Stock Location in a Distribution Warehouse

Author

Listed:
  • Carl Kallina

    (American Can Company, Greenwich, Connecticut)

  • Jeffrey Lynn

    (American Can Company, Greenwich, Connecticut)

Abstract

Consider a distribution warehouse divided into reserve storage and staging areas. The warehouse stores a variety of items and receives orders for any combination of items. Goods are moved from reserve storage to staging area, where they are selected to fill the given orders. The problem is to locate items in the staging area in order to minimize the expected labor costs of order selection. Several years ago, J. L. Heskett [Heskett, J. L. 1963. Cube-per-order index---A key to warehouse stock location. Transportation and Distribution Management 3 (April) 27--31.] proposed a criterion, called the cube-per-order index (CPO) rule, for solving this problem. The criterion was justified heuristically by means of numerical examples. Recently [Kallina, C. 1976. Optimality of the cube-per-order index rule for stock location in a distribution warehouse. Working paper, American Can Company, March.], one of the authors has shown that the class of problems considered by Heskett can be formulated as a linear program, and that the CPO rule is in fact the optimal solution. In this present paper, we will (1) summarize some basic background material, (2) describe the computational steps for implementation of the CPO rule, and (3) discuss some practical conclusions gathered from experience in actually applying the rule to assist in warehouse layout.

Suggested Citation

  • Carl Kallina & Jeffrey Lynn, 1976. "Application of the Cube-Per-Order Index Rule for Stock Location in a Distribution Warehouse," Interfaces, INFORMS, vol. 7(1), pages 37-46, November.
    • Handle: RePEc:inm:orinte:v:7:y:1976:i:1:p:37-46
    DOI: 10.1287/inte.7.1.37
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    Cited by:

    1. Subir S. Rao & Gajendra K. Adil, 2017. "Analytical models for a new turnover-based hybrid storage policy in unit-load warehouses," International Journal of Production Research, Taylor & Francis Journals, vol. 55(2), pages 327-346, January.
    2. Gu, Jinxiang & Goetschalckx, Marc & McGinnis, Leon F., 2007. "Research on warehouse operation: A comprehensive review," European Journal of Operational Research, Elsevier, vol. 177(1), pages 1-21, February.
    3. Yu, Y. & de Koster, M.B.M., 2006. "Optimal Storage Rack Design for a 3D Compact AS/RS with Full Turnover-Based Storage," ERIM Report Series Research in Management ERS-2006-026-LIS, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    4. Gu, Jinxiang & Goetschalckx, Marc & McGinnis, Leon F., 2010. "Research on warehouse design and performance evaluation: A comprehensive review," European Journal of Operational Research, Elsevier, vol. 203(3), pages 539-549, June.
    5. Yu, Y. & de Koster, M.B.M., 2007. "Optimal Zone Boundaries for Two-class-based Compact 3D AS/RS," ERIM Report Series Research in Management ERS-2007-034-LIS, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    6. Bortolini, Marco & Faccio, Maurizio & Gamberi, Mauro & Manzini, Riccardo, 2015. "Diagonal cross-aisles in unit load warehouses to increase handling performance," International Journal of Production Economics, Elsevier, vol. 170(PC), pages 838-849.
    7. de Koster, Rene & Le-Duc, Tho & Roodbergen, Kees Jan, 2007. "Design and control of warehouse order picking: A literature review," European Journal of Operational Research, Elsevier, vol. 182(2), pages 481-501, October.
    8. Schuur, Peter C., 2015. "The worst-case performance of the Cube per Order Index slotting strategy is infinitely bad – A technical note," International Journal of Production Economics, Elsevier, vol. 170(PC), pages 801-804.
    9. de Koster, M.B.M. & Le-Duc, T. & Roodbergen, K.J., 2006. "Design and Control of Warehouse Order Picking: a literature review," ERIM Report Series Research in Management ERS-2006-005-LIS, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.

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