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Designing self-storage warehouses with customer choice

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  • Shuyu Zhou
  • Yeming (Yale) Gong
  • René de Koster

Abstract

Self-storage warehousing is a rapidly growing industry where consumers or companies can rent storage space for personal or company use, over a certain horizon. This paper addresses the question of how to design the facilities so that revenue can be maximised over a finite horizon, considering multiple demand requirements with respect to size, pricing, location within the facility, climate control, security or outside access, among others. Using a customer choice model to specify the probability of purchase for each fare product as a function of the set of fare products offered, we propose methods to design self-storage warehouses while allowing different customer choice behaviours. We model the problem as a mixed-integer program and solve it using column generation and branch-and-price algorithms. In addition, we study the impact of re-layout and methods to modify facility layout, since self-storage facilities are relatively flexible in layout and individual storage compartments can be adapted to changes in demand. We validate our model using the data of four self-storage warehouses, and show our method can improve the expected revenue by nearly 11% on average for these cases.

Suggested Citation

  • Shuyu Zhou & Yeming (Yale) Gong & René de Koster, 2016. "Designing self-storage warehouses with customer choice," International Journal of Production Research, Taylor & Francis Journals, vol. 54(10), pages 3080-3104, May.
    • Handle: RePEc:taf:tprsxx:v:54:y:2016:i:10:p:3080-3104
    DOI: 10.1080/00207543.2016.1158880
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