FP II Single

8/6/2019 FP II Single

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Facilities Planning

Lecture 7-8:

Layout Planning

Algorithmic Approaches


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11.07.2010 Dr. Erkan Bayraktar 2

Quadratic Assignment

Problem

Departments are to be assigned topredetermined locations (sites) in the floorplan.

Each department is treated as a unit square,so that any department can be assigned toany site.

This is a quadratic assignment problem,since the cost of assigning a department toa particular location depends on the

locations of the other departments.


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...

Mathematical Formulation


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Quadratic Assignment

Problem

Optimal solution procedures aredifficult to solve for realistic sizeproblems. Therefore, two types of

heuristic procedures are considered.

Construction Procedure

Improvement Procedures


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Evaluation of Facility Designs

Which layout is best?

Is layout A better than Layout B?

Several Common Methods for Block Layouts

Distance Based Scoring

Requires flow and distance

Adjacency Based Scoring

Requires subjective AEIOU relationships

Multi-Objective Scoring

Many methods available

Weighted factor scoring


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Distance Based Scoring

Volume-Distance product

Distance usually measured rectilinearly, between centroids

Assumes that the material flow system has already beenspecified

Assumes that the variable flow cost is proportional to distance

Distance often depends on the aisle layout and material handlingequipment

Can also add a cost term ($/dx) to convert to $


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How should you measure

distance?

Most common is rectilinear distancebetween centroids

d(X, P) = |x - a| + |y - b|

Absolute difference in x direction PLUS absolutedifference in y direction

P = (a, b)

X = (x, y)


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Finding Centroids (x*, y*)


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Fun with Centroids!

Centroid-to-centroid distances can beminimized easily, but may produceunrealistic facilities!


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Layout Evaluation: Distance-

based scoring Example


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Example Each dept. is 100 x 100


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Can you find a better

arrangement?

Keep same department and facilityshapes.


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Adjacency-Based Scoring

Score arbitrarily-definedif areas are adjacent

Requires definition of adjacent

Share a common border

Centroids within certain distance

Can penalize if X relationship areas are adjacent


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Example - Revisited


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Multi-Objective (weighted

Factor) Scoring

Useful in group evaluation situations

Must decide on weights

While totally subjective, allows for faircomparisons


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Algorithmic Approaches

SLP is informal

Does not provide a formal procedure or algorithmfor critical steps.

Algorithm: a precise rule (or set of rules) specifying

how to solve some problem

Has an objective function

Amenable to computer implementation

Types of input

Qualitative flow data (i.e. relationship chart)

Quantitative data (i.e. from-to chart, flow-between)

Both


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Algorithmic Approaches:

Classification of algorithms

Based on objectivefunction

Distance based

Adjacency based

Format of layoutrepresentation

Discrete representation

Continuous representation

Primary function

Improvement

Construction

Algorithms mustaddress two issues:

The order ofplacement of

departments in therelationship diagram(or unit block plan)

The relative

locations of thedepartments


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Based on objective function


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Distance-based Algorithms:

Objective function

Minimizeflow * distance

Called a distance-based objective

Distance is measured rectilinearly from the department centroid

Input is a from-to chart

fij= amount of flow (or, number of trips or unit loads) betweendepartments i and j

cij= cost of moving a unit load between departments i and j

d

ij

= distance between departments i and j


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Adjacency-based Algorithms:

Objective function

Maximizeadjacency

Input is an activity relationship chart

Sum of all adjacent relationship values

Easy to use and intuitive

But disregards distance between non-adjacent departments

Means you can generate layouts with similar scores but vastlydifferent travel distances

otherwise

adjacentarejandisdepartmentifxij

,0,1


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Adjacency-based Algorithms ...

Normalized adjacency score

Or

Efficiency Rating


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Based on format of layoutrepresentation


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Layout Representation Format

Discrete

The area of each department is rounded off to the nearestinteger number of grids.

A smaller grid size yields a finer resolution and gives moreflexibility in department shapes, but

Results in a larger number of grids which complicatescomputations. Why?

Continuous

Does not use a grid

More flexible but more difficult to use

Usually limited to rectangular building and departments


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Graphical Representation

Points and lines representation is notconvenient for analysis


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(cont.)

Most procedures employ a unit areasquare representation as an approximation

Space available and space required for eachactivity are expressed as an integer multiple of

the unit area.


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(cont.)

Unit Square Area approximation can also berepresented by a two dimensional array ormatrix of numbers

Easy to manipulate (e.g., determine adjacency)but difficult to visually interpret


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Examples of Split and Unsplit

departments


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Factory CAD/Flow/Plan

AutoCAD based add-on

Has multiple applications

CAD: drawing templates

FLOW: evaluation of material flow; manual SLPtype manipulation

PLAN: layout alternative generation

FactoryPLAN

Uses Spiral-type algorithm to generatealternative layout options


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FactoryCAD

Overlay to

AutoCAD


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Based on Primary function:

Improvement based

Construction based


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Classification of Algorithms:

Primary functions

Improvement-based

Start with an initial layout and try to improve it throughincremental changes

Example

Pair-wise exchange

CRAFT (Computerized Relative Allocation of FacilitiesTechnique)

Construction-based

Develop from scratch' and progressively build layout

Example

ALDEP (Automated Layout Design Program)

CORELAP (Computerized Relationship Layout Planning)


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Improvement-based:

Pairwise Exchange Method (i)

Compute the total cost of existing layout based on

initial from-to chart and distance matrix (c = f *d)

Exchange two departments

Recompute the total cost

Consider all pairwise interchanges and evaluate thecost of each

Perform the one that yields the greatest reduction intotal cost

Continue until no further improvement is obtained

Not guaranteed to find the optimal solution but willbe locally optimal.

The method assumes departments areas are equal


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Improvement-based:

Pairwise Exchange Method (ii)


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Improvement-based:

Pairwise Exchange Method (iii)

TCABCD = 5(15)+8(35)+10(50)+5(20)+3(35)+2(15)=1090

TCBACD = 5(15)+8(20)+10(35)+5(35)+3(50)+2(15)=940

TCCBAD = 5(20)+8(35)+10(15)+5(15)+3(35)+2(50)=810

TCDBCA= 5(35)+8(15)+10(50)+5(20)+3(15)+2(35)=1010

TCACBD = 5(35)+8(15)+10(50)+5(20)+3(15)+2(35)=1010

TCADCB= 5(50)+8(35)+10(15)+5(15)+3(35)+2(20)=900

TCABDC= 5(15)+8(50)+10(35)+5(35)+3(20)+2(15)=1090

C-B-A-D


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Improvement-based:

Pairwise Exchange Method (iv)

Remarks:

Not guaranteed to yield the optimal layout(heuristic)

It is possible to cycle back

Symmetric layout arrangements are possible

Only considers departments with equal sizes

(different size -> CRAFT)

BE CAREFUL! on constructing from-to chart


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Improvement Algorithms

Too many degrees of freedom to devise a good

method for modifying the block plan.

Most all improvement algorithms limit the kinds ofchanges that are permitted.

Basic procedure

CHOOSE a pair (or triple) of activities

ESTIMATE the effect of exchanging them

EXCHANGE if the effect is to reduce the total cost

CHECK to be sure the new layout is better

Repeat Until no more improvements are possible.


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Improvement Algorithms

To CHOOSE a pair of activities

Activities that have the same area, or

Activities that share a common boundary.

There are many possibilities for EXCHANGE when

the areas are not equal.

Generally, the shape ratio and corner count rules areviolated, therefore, manual adjustment is sometimesrequired.

ESTIMATE the value of the exchange by comparingthe cost if the two centroids are switched.

However, this estimate will not necessarily be correct forunequal area activities.


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CRAFT

Computerized Relative Allocation

of Facilities Technique

Download from:

http://www.me.utexas.edu/~jensen/ORMM/frontpage/jensen.lib/index_omie.html


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CRAFT (Computerized Relative

Allocation of Facilities Technique)

Perhaps the most famous improvement algorithm

First computer-aided layout algorithm (1963)developed based on the study of Armour & Buffa(1933)

Improvement-type layout algorithm

Inputs

Existing block layout, Flow matrix (from-to)

Distance metric used is the rectilinear distance betweendepartment centroids.

Cost per unit distance matrix (optional)


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CRAFT

The main objective behind CRAFT is to minimize

total transportation cost:

Where Transportation cost = flow * distance * unit cost

Requires the assumptions that:

Move costs are independent of the equipment utilization.

Move costs are linearly related to the length of the move.


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Steps in CRAFT1. Determine department centroids.

2. Calculate rectilinear distance between centroids.3. Calculate transportation cost for the initial layout by multiplying

From-To (flow) chart,

Unit cost matrix, and

From-To (distance) matrix

4. Improve the layout by performing all-possible two or three-wayexchanges

Consider department exchanges of either equal area departmentsordepartments sharing a common border.

Determine transportation cost of each departmental interchange.

Select and implement the departmental interchange that offers thegreatest reduction in transportation cost.

5. Repeat the procedure for the new layout until no interchange is ableto reduce the transportation cost.


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Example 1: CRAFT


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Example 1: Possible Swaps

CRAFT does not actually swap and re-calc centroids

Swaps centroids and looks for best improvement

Iteration #1 - Possible Swaps

A-B Cost = 2650, C-D Cost = 2650, A-C Cost = 2270 *

Iteration #2 - Possible Swaps

C-B Cost =1950, C-A (already did this), A-D Cost=1950

Break tie abitrarily and select A-D swap, actual Cost=1870

Iteration #3 Possible Swaps

C-B Cost =2270, A-D (already did this one), A-C Cost =2500

No improvement found

STOP


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Example 1: Improved Layout


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Example 2:


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Example 2: CRAFT

Initial Layout1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 181 A A A A A A A A A A G G G G G G G G

2 A A G G

3 A A A A A A A A A A G G G G

4 B B B B B C C C C C E E G G G G G G5 B B C C E E E E E E E E

6 B B C C C C C E E E E E E E E

7 B B B B B D D D D F F F F F F F E E

8 D D D D D D D F F F

9 D D F F F F F F

10 D D D D D D D D H H H H H F F F F F

Dummy Department

Receiving D. Shipping D.


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New Layout

after exchanging E and F

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

1 A A A A A A A A A A G G G G G G G G

2 A A G G


4 B B B B B C C C C C F F G G G G G G

5 B B C C F F F F F F F F

6 B B C C C C C F F F F F F F

7 B B B B B D D D D E E E E E E F F8 D D D D D D D E E F F

9 D D E E E E E E F F

10 D D D D D D D D H H H H H E E F F F

Receiving D.Shipping

D.


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Example 2: Contd.


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Final LayoutAfter

exchangingB and C

Receiving D.Shipping D.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

1 A A A A A A A A A A G G G G G G G G2 A A G G


4 C C C B B B B B B B F F G G G G G G

5 C C C B B F F F F F F F F6 C C B B B B B B F F F F F F F

7 C C C C B D D D D E E E E E E F F

8 D D D D D D D E E F F

9 D D E E E E E E F F10 D D D D D D D D H H H H H E E F F F

M l Adj t t CRAFT


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Manual Adjustment on CRAFT

Output

50


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CRAFT Facts

A heuristic solution procedure for the more

generalize quadratic assignment problem

CRAFT only exchanges departments that are

Adjacent (share at least one common edge)

Have equal areas

Adjacency is a necessary but not sufficient criteriafor swapping departments

CRAFT simplistically assumes cost is linearly

related to distance;

1=1$ means 100=$100

In real life, you have fixed cost of investment in MH

0=$100 1=$101 100=$200


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Limitations in Exchanging

Exchange dept.#2 with dept. # 1,3,and 4


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CRAFT Facts...

Quality of final solution depends on the initial layout

CRAFT is a path-oriented method so the final layout isdependent on the initial layout.

Therefore, a number of different initial layouts should beused as input to the CRAFT procedure.

CRAFT allows the use of dummy departments torepresent fixed areas in the layout.

Final solution may be locally optimal, not globallyoptimal

Many derivatives have emerged

MCRAFT, BLOCPLAN, MULTIPLE, etc.

Mixed Integer Programming Models


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MICRO-CRAFT (MCRAFT)


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MICRO-CRAFT (MCRAFT)

PC version of CRAFT allowing non-adjacent exchanges

Can exchange any two departments whether they areadjacent or not

Shifts other departments automatically if the exchangeddepartments are not adjacent and equal sized

Uses bands and assigns grid within band to a department

MCRAFT requires the user to specify

Facility dimensions (rectangular width X length)

Number of bands

Layout vector or fill sequence

Computes grid size, number of rows and columns

Procedure

Starts from top-left corner of building

Sweeps bands in a serpentine fashion


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MCRAFT Micro CRAFT

Horizontal sweep patterns are used to

place departments (similar to ALDEP)

and move departments while two non-adjacentunequal-size departments are being exchanged

Layout is specified by a sequence of departments


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MCRAFT1. After the band width is set, MCRAFT requires a vector (the

order) of the departments as an initial layout.

Based on this vector, it locates the departments following theserpentine flow directions

2. A swap/exchange selection procedure similar to that of

CRAFT is implemented.

Not necessarily limited to adjacent or equal-size departments!!

3. If any improving exchange is selected, then the two

departments are swapped using a shifting procedure of theother departments.

4. REPEAT 3 and 4 until no improvement can be made.


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MCRAFT Example initial


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MCRAFT Example, initial

layout

MCRAFT Example final


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MCRAFT Example final

layout


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MCRAFT - Comments

Smoother shapes compared to CRAFT

Facility shape is a restriction

Allows multi-floor layout planning

Uses a From-To chart for input flow data

Band widths are equal

A department may occupy two bands

Unless departments are already arranged in bants, it will notcapture the initial layout properly.

More exchange alternatives. The number of alternativesincrease exponentially with the number of departments

Fixed departments may cause problems

Fixed department may move

MCRAFTs primary strength is also its primary weakness


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BLOCKPLAN


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BLOCPLAN

Like MicroCRAFT, arranges departments in bands

Uses a relationship chart as well as a from-to chart

Can be used only one at a time

Objective function: Measures layout cost using

distance based, or

adjacency-based, or

REL-DIST

Number of bands determined by the program

Usually two or three bands

Band widths may vary

Departments contained in only one band

departments are rectangular

Uses continuous layout representation

Can do both construction and improvement


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Example 6.1


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Flow-Between and Relationship Chart


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Example

E=0.63REL-DIST = 2887


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Example Contd.

E=0.63

REL-DIST = 2708

A=10, E=5, I=2, O=1, U=0, X= -10


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MULTIPLE


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MULTIPLE / LayOPT

MULTI-floor Plant Layout Evaluation

Can also be used for single floors

Similar to CRAFT

Identical Objective function

Not restricted to rectangular shapes

Discrete representation

Improvement-type algorithm

Uses From-To chart

Uses two-way exchanges

Sweep patterns are used to place departments in layout

Sweep pattern is based on space filling curve (SFC) concept

Many alternative SFCs can be created

Layout is specified by a sequence of departments


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MULTIPLE...

Pairwise exchange is performed on the sequence

position of departments

Like MicroCRAFT and BLOCPLAN (and unlike CRAFT),MULTIPLE can exchange non-adjacent departments

Not restricted to equal size departments

Layout vector denotes order of departmentplacement

Fill sequence is determined by Space Filing Curve(SFC)

Can exchange departments by changing their position inlayout vector

SFC can bypass fixed departments or areas

SFC can move around a fixed department


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Example


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Department shapes


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Department shapes

Ratio of its longer side to its shorter side

Divide the area of smallest enclosingrectangle (SER) to the area of department.

Divide its perimeter into its area

Ideal shape: S*=P/A=4( )/A

Normalized shape factor: s/s*

Reasonable shapes 1.0< F < 1.4

A


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Layout Construction Algorithms


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Construction Algorithms

For i = 1 to n

SELECT an activity to be placedPLACE the selected activity in the layout

End For

Selection rules

Choose the next activity having the largest number of A(E, I, etc.) relationships with the activities already in thelayout. Break ties randomly.

Supplement above procedure with TCR for choosing firstdepartment and breaking ties.

Consider flow cost chart and user specified placementpriorities.


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Placement Rules

Contiguity Rule

If an activity is represented by more than one unit areasquare, every unit area square representing the activity mustshare at least one edge with at least one other unit areasquare representing the activity.

Connectedness Rule

The perimeter of an activity must be a single closed loop thatis always in contact with some edge of some unit areasquare representing the activity.

The followings are infeasible shapes for activities.


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Placement Rules (cont.)

Five basic shapes for an activity representedby 4 unit area squares.

Determining possible shapes becomes nontrivial

for activities with more than 5 unit area squares,and some of the shapes have bizarreconfigurations.


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Placement Rules (cont.)

Therefore, additional rules are often used.

Enclosed Voids Rule

No activity shape shall contain an enclosed void.

Shape Ratio Rule

The ratio of a feasible shapes greatest length to its greatestwidth shall be constrained to lie between specified limits.

Corner Count Rule

The number of corners for a feasible shape may not exceed aspecified maximum.

Given an activitys shape there are a large number ofalternative placements for it in a layout, including differentlocations and mirror images and rotations.


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Bounded placement procedures

Accept a specified facility configuration and fit the activitiesinto the facility.

May not be able to enforce all of the activity shape rules.

E.g., ALDEP

Free placement procedures

Create a layout without regard to the resulting facilityconfiguration.

May produce layouts requiring considerable adjustment toconform to conventional building configurations.

E.g., CORELAP


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ALDEP

Automated Layout DEsign

Program


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ALDEP

Automated Layout DEsign Program by Seehof and

Evans (1967)

Construction algorithm

Same basic data input requirements and objectives

as CORELAP

Relationship chart

Department areas

Additionally, sweep width

Block Size, Minimum acceptable closeness rating (MACR)

Arbitrarily selects first department

Allows fixed departments


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ALDEP- Layout Construction

First department selected randomly

Next department selected based on relationshipwith first

If more than one with same relationship, choice is random

If no departments with minimally acceptable closeness

relationship (MACR) exist, choice is random

Place first department in the upper left corner andextend downward.

Develop layout using serpentine space filling curve.

Additional departments begin where the previousone ended

Sweep width < area of smallest department

Why?


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Sweep Width


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Sweep Pattern

Can accommodate a variety of building shapes andirregularities.

Scoring Mechanism: Adjacency Score

ALDEP rates the layouts by determining an adjacencyscore by assigning values to the relationships amongadjacent departments.

A = 64, E = 16, I = 4, O = 1, U = 0, X = -1024


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ALDEP-Example


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ALDEP - Layout


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Example


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Scoring Procedure

AdjacentDepartments Relationship Value Rating4-2 and 2-4 E 16 324-1 and 1-4 I 4 8

2-1 and 1-2 E 16 321-6 and 6-1 U 0 06-5 and 5-6 A 64 128

6-7 and 7-6 E 16 325-7 and 7-5 I 4 87-3 and 3-7 U 0 0

Total 240


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Example:

Excel example:

ALDEP
http://../2008/ALDEP.xlshttp://../2008/ALDEP.xlshttp://../2008/ALDEP.xls


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CORELAP

COmputerized RElationshipLAyout Planning


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CORELAP

COmputerized RElationshipLAyout Planning by Lee andMoore (1967)

Construction algorithm Inputssimilar to ALDEP

Relationship chart

Number of departments

Area of each department

Weight of REL chart entries

Calculates a total closeness

rating (TCR) from therelationship chart

Department with highest TCRis placed in the center

Tie-breaker is area size

Next department chosen bythe relationship with firstdepartment

Start with A relationships

If no As, then Es, Is, etc.

Calculate the placementrating

Based on relationshipweights

Sum of weights ofadjacent departments

Tie breaker is boundarylength


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Algorithm:

Compute Total Closeness Rating (TCR)

A=6 E=5 I=4 O=3 U=2 X=1

Highest TCR placed into center of layout(rect. shape)

Search for next dept to enter as one with A,then E, etc and use TCRs to break ties(Highest TCR, Largest Area, Lowest Dept.

Number (random))

Use placing rating methodto decide placement

1st

8

1

2 3

7 6

5

4

2nd


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CORELAP - Example

3 enters first

4 enters next (A with 3)

2 enters (both 1 & 2 have E but 2 has higher TCR)

1 enters next (has A with 2)

5 enters last

Order of entry 3-4-2-1-5


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CORELAP - Layout Concept

Get rect. shaped depts

(generally) andirregular borders

Highest TCR goes in

center to increaseadjacency

Same layout each time

Scoring uses smalleris better

Details in book.


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Placement decision:

Placing rating: sum of the weighted closenessrating btw the department to enter the layout andits neighbors.

Place to the highest placing rating.

In case of tie, compare boundry lengths of thetied locations.

Calculate layout score

Sum (Numerical closeness rating X lenght of shortestpath)

Use shortest rectilinear path between departments

NOT rectilinear distance btw departments


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Example:

Excel example:

CORELAP Original

CORELAP
http://../2008/CORELAP-original.xlshttp://../2008/CORELAP.xlshttp://../2008/CORELAP-original.xlshttp://../2008/CORELAP.xlshttp://../2008/CORELAP.xlshttp://../2008/CORELAP-original.xls


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Notes on ALDEP and CORELAP

Construct initial block diagrams

They are arbitrary and use subjectiveinformation

They are useful in that they help the

designer generate layout ideas

Do not treat scores as ratio values

200 pts is not twice as good as 100 pts

Many other factors to consider in any reallayout project

Codes for these programs are almost non-

existent


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What algorithm to choose ?

Whats the task?

Construction

Improvement

What are theconstraints?

Shape

Fixed departments

What is the

objective function ?

Distance-based

Adjacency-based

All computerizedoutputs still need to

be massaged

Dynamic Layout Analysis -


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y y y

Simulation

Many languages available

Arena most widely used for general purpose

AutoMOD most widely used for MH systems

Existing Hot Dog Line


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Example AutoMOD


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Computerized Layout Planning

Does not provide an absolute bestmodel for finding the optimal layout.

Does provide algorithms for evaluatinga large number of alternative layouts.

It is important to understand theunderlying assumptions and scoringmodels of each procedure in order tocorrectly interpret the results.


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Homework

Chapter 6

6.7, 6.12, 6.13

6.18, 6.23,

6.25, 6.27, 6.29

6.31,

6.38, 6.40


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LOGIC

Layout Optimization with Guillotine Induced

Cuts.

Inputs are

from-to chart,

total area,

dept areas

Distance-based objective function

Improvement algorithm, can be used forconstruction too


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LOGIC: Algorithm

Divides building into smaller and smaller

sections by successive horizontal or verticalcuts.

Stops when each section is a single

department

Constructs a tree to keep track of cuts andsubsections

Choice of cuts made using search strategy:

Such as simulated annealing


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Cut-Tree for ExampleA,B,C,D,E,F,G,H


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Example ...


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Selling Your Plan

Lecture 10 (Chp.11 & Chp.12):

Evaluation and Selection process

Preparion, Presention, Implemention,and Maintenance


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7/11/2010 Dr. Erkan Bayraktar 2

Selling Your Plan

The Layout

Try to illustrate howthe design works

2-D or 3-D CADDrawing

May need large plots

Include flow lines

Show analysis results

Show multiplealternatives

Simulation model ifpossible


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Selling Your Plan

The Written Report

Make it easy to read and

understand

Avoid detailed calculations inbody of report, use summarytables, plots etc.

Label all Figures and Tableswith a sequential number andadd a caption

Be organized and neat, useconsistent headers, sub-headers, 1.0, 1.1, 1.1.1

Dont teach FP, SELL yourdesign!

Writing IS re-writing!

Letter of Transmittal

Cover Page

Executive Summary (1-page only)

Table of Contents

Introduction (Problem description,be specific)

Current System (if applicable)

Operation and Analysis

Critique

Proposed System

Design Methodology

Operations and Analysis

Results/List of Features

Cost Justification

Plan of Implementation (optional)

Conclusions (rephrase and restateintro) and Recommendations

Appendices (with supporting data,

reference them in order)


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Selling Your PlanThe Oral Presentation

Be brief and direct

Be confident, well-dressed

Use quality visuals and avoid gimmicks

Match speech to sequence of slides

Be open to questions at any time

Stay on point!

What is the problem?

What should be done?

How should it be done?

Why should your design be implemented?

List features

REHEARSE, REHEARSE, REHEARSE!


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Evaluation & Selection

Economic Justification


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Objectives of this Section

Discuss the importance of proper economic

justification (EJ).

Present a basic 7-step approach.

Understand some of the difficulties related

to FP/MH investments.

Review some useful techniques


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Evaluation


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Evaluation


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Why is EJ Important?

Stockholders have money.

They dont want to give it to you

Interest Lost

Opportunity Cost unless you offer a greater rate ofreturn Youd like to determine that rate

What if you make a mistake?


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A 7-Step Process

Specify the alternatives

Define the planning horizon

Estimate the cash flows

Specify the interest rate

Compare the alternatives

Perform sensitivity analysis

Select the best alternative


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1. Specify the alternatives

Many possible solutions usually exist.

Define a mutually exclusive set offeasible alternatives.

Avoid size gates.

Get the big picture.

Design the whole, justify the whole, andimplement the pieces.

Dont forget the Do-Nothing alternative.

Some Rules of Thumb


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. Think long term, (5-10 years)but not too long. Dont confuse PH w ithequipment or depr. life. Use the same PH for all

alternatives. Some companies have standardPHs.

2. Define Planning Horizon


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3. Estimate Cash Flows

Most difficult aspect

Yearly estimates of costs and benefits

Comprised of direct, indirect, and intangiblefactors.

Must be based only on future costs andbenefits only.


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Categories of Costs/Benefits

Direct Market Consequences

items which have an established market price, such as:

Increased Sales

Labor (direct, indirect)

Energy, Materials, Space

Indirect Market Consequences

items not directly priced in the marketplace but a value isassignable.

Safety, Inventory, Speed of service

Intangibles

items which cannot be assigned a value

Flexibility/expandability

Effect on future business practices

Effect on market share

www.grossassociates.com/cal
http://www.grossassociates.com/calculator.cfmhttp://www.grossassociates.com/calculator.cfm


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culator.cfm
http://www.grossassociates.com/calculator.cfmhttp://www.grossassociates.com/calculator.cfm


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Indirect and Intangible Items

Higher morale

Better customer service

Reduced supervision

Reduced training

Less clutter

Reduced product loss

Reduced product damage

Experience with newtechnology

Increased flexibility

Less resistance to change

Less paperwork

Improved mgmt productivity

Faster deliveries

Better quality of life

Improved reliability

Ease of design change

Improved relationships

Reduced handling

Less expediting

Reduced inspection

Reduced scrap

Reduced rework

Reduced setup time

Better quality

Reduced transportation

Increased safety

Better scheduling andworkflow


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What Are They Worth?


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Some Common Effects

Can be tricky to

evaluate:1. Increased Throughout

2. Decreased Labor

3. Improved Quality

4. Improved Safety

5. Decreased Inventory

6. Space Savings


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Increased ThroughputDemand > Capacity

Each additional unitproduced can be sold

Value each added unit asthe profit gained

Watch for added expensesdownstream.

Added capacity needed,

Integer effects

Returns increase

Fieldsupport/maintenance

Etc.

Demand < Capacity

Each added unit cant besold

Can deliver units faster

Can meet demand withfewer production hours

Value of time saved is theresult of labor saved,energy saved.

Look for other creative

uses for excess timeavailable.

Training? Selling?Maintenance?

Decreased Labor


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(Automation)

Will excess employees be laid off?

Labor $ saved

Will they displace the hiring of temps?

Lower hiring expense?

Can we use them to increase sales?

Increased revenue

Can we eliminate a shift?

Savings of labor, energy, managementoverhead


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Improved Quality

Fewer rejects

increased throughput (just did that one!)

Happier customers

Increased demand (can you meet it?)

How will it affect future growth?

Fewer returns

Lower demand for:

Customer service

Return processing

Field repair


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Improved Safety

Cost Avoidance

Medical costs

Lost Time

Replacement Worker Costs

Lost productivity

Workers Comp

Reduced Turnover

Hiring expense


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Lower Inventory Levels

Interest earned on capital

Storage Space Savings

Energy

Insurance

Protection

Lease

Savings in loss due to damage, pilferage

Negative effects

Slower response?

Higher costs charged by vendors (storage)?

Lost sales?


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Space Savings

What is each square foot worth?

Dont value it using allocated overhead.

Concentrate on actual present savings:

Energy

Insurance

Protection

Lower lease cost (if leasing space)

Potential sale or lease of excess space (if own space)

Future cost avoidance:

May delay need for expansion

Must analyze (predict) future growth


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Activity Based Costing

A better way to understand and control indirect costs.

It assigns costs to products or customers based on theactivitiesinvolved and the resources they consume.

Overhead is traced to a product rather than spread across allproducts based on direct labor hours.

Products and customers consume activities which in turn,consume resources.


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4. Specify the Interest Rate

Hurdle rate

Return on investment

Minimum attractive rate of return (MARR)

Interest rate used in DCF calculations

Should reflect opportunity cost of alternativeuses for capital

Most American companies use MARR of 10-20%

Japanese firms use 5-10%


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5. Compare the Options

Many different methods exist

Companies have preferred ones

Most popular are:

Net Present Worth (NPW)

Internal Rate of Return (IRR)

Compute After Tax with inflation

Easy to use, but incorrectAssumes i=0%Fails to consider cash flowsbeyond PP


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Is Payback Any Good?Yr A B

0 -$1000 -$2000

1 250 1000

2 250 10003 500 0

4 1000 -200

a) What is the payback period for each?

b) Which do you think is best?


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Finding Present Values

Example of Investment


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Alternatives

Two mutually-exclusive alternatives are compared

against a do-nothing option (NPW=0)

i=13%

Select the option that Maximizes NPW

Exercise - Should we


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invest?


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Using Spreadsheets Illustrated here with MS-Excel


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6. Supplemental Analysis

What if some of your data is wrong?

How much error will impact the decision to invest?

Breakeven Analysis

requires least amount of information

Is true value above or below breakeven?

Sensitivity Analysis

requires more information

Whats the range of possible values?

Risk Analysis

requires the most information

What are the possible values and their probabilities?


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7. Select Preferred Option

Obtain support from users of the system

Speak the language of the listener

Dont oversell technical aspects

The decision makers perspective is broad

This proposal is just one of many

Selling is the name of the game

Show well-being to the firm!

THE GOLDEN RULE . . .

Those with gold make the rules.


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Facilities Planning

Lecture 11:Warehousing & Distribution

Systems


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July 11, 2010 Dr. Erkan BAyraktar 2

Why to have a Warehouse

To better match supply with customer demand

Allows us to respond quickly to customer demand

Allows for buffering against surges in demand or supply

To consolidate product to reduce transportation

costs and to improve customer service

To provide value added processing

Assembly may occur Dell

LL Bean Monogramming


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Missions of a Warehouse

To effectively ship product in any configuration to

the next step in the supply chain without damagingor altering the products basic form

Improving order picking operations

Utilization of cross-docking

Increasing productivity

Effectively utilizing energy, labor, space resources

Old rule of thumb: When warehouse 80% full, more space isneeded.

Increasing value-added services

Warehouse Management


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System (WMS)

Software that tracks and manages

warehouse activities

Records receipts of inventory into thesystem and registers shipments out

Manages the stock locations and recordswhere goods are placed

Helps generate orders for replenishment

Can help with assigning items to locations inthe warehouse

Warehouse Management Systems(WMS)


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Operations of a WarehouseOperations of a Warehouse


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Inbound Processes

Receiving

Put-away

Outbound Order-Picking

Checking, Packing, Shipping


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Typical Warehouse Functions

REpackaging

Cross-Docking


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Receiving and Shipping


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Receiving and Shipping

Consider handling, storing, and control

requirements to provide the propercombination of space, equipment, andpeople.

Receiving and shipping functions interfacewith the outside environment.

Receiving:

Accounts for about 10% of operating costs in a

facility

Shipping:

Accounts for around 15% of total costs

Receiving and Shipping:


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Facility Requirements

Receiving

Stage and spot carriers

Waiting

Maneuvering

Unloading

Dockboards

Receiving area

Staging area

Office area

Shipping

Staging area (mayinclude accumulate andpack)

Office area

Stage and spot carriers

Dockboards


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Desirable Attributes.

Directed flow paths (avoid double handling)

Continuous flow of effort (try to scheduleinbound shipments)

Concentrated area that minimizes material

handling

Efficient material handling (try to influence unitload configuration)

Provide safe operations

Minimize damage

Provide good housekeeping


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Receiving principles1. Dont receive

2. Prereceive (Advance shipping notes)3. Cross-dock cross-dockable material

4. Put away directly to primary or reserve locations

5. Stage in storage locations6. Complete all necessary steps for efficient load

decomposition and movement at receiving

Prepackage in issue increments

Apply necessary labeling and tags

Cube and weigh for storage and transport planning


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Receiving principles...7. Sort inbound materials for efficient putaway

8. Combine putaways and retrievals whenpossible

9. Balance the use of resources at receivingby scheduling carriers and shifting time-consuming receipts to off-peak hours

10. Minimize or eliminate walking by flowinginbound material past workstations.


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Shipping principles1. Select cost and space effective handling units

2. Minimize product damage

Unitize and secure loose items in cartoons or totes

Unitize and secure loose cases on pallets

Unitize and secure loose pallets in outbound trailers

3. Eliminate shipping and direct-load outboundtrailers4. Use storage racks to minimize floor space

requirements for shipping staging

5. Route on-site drivers through the site andminimize paperwork and time

6. Use small-parcel shipping



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Space Planning

What is to be receiving and shipped?

What, how much, when

Receiving and shipping analysis chart

Number and type of docks

Estimate with simulation, queuing analysis

Configuration

Carrier approaches, traffic flow and waiting area

Apron depth, bay width

An indivual with proper equipment can load and unload 7500lb/hr.

Space requirements for receiving and shipping area:

Personnel Convenience, Offices, Material Handling EquipmentMaintenance, Trash Disposal, Pallet and Packing Material Storage,Truckers Longue, Staging Area, Equipment Maneuvering


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Equipment Planning

Equipment required for a proper interface

between the carriers and the docks.

Dock levelers

Portable ramp

Permanent ramp

Yard ramp

Scissor lift

Bumper pads

Dock shelters


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Storage & warehousing

Storage & warehousing


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Storage Function

Activity of storing raw materials, supplies,and in process material.

Warehousing Function

Activity of storing finished goods.

Accounts for around 15% of warehouse

operating expenses

Storage and Warehousing


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Basic Functions

Receiving

Identification andsorting

Dispatching to storage

Placing in storage

Storage

Removing from storage

Order accumulation

Packing

Shipping

Record keeping

Additional Functions

Inbound inspection

Parts preparation

Kitting

Item packaging



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Goal:

Maximize resourceutilization whilesatisfying customerrequirements, or

Maximize customerservice subject toresource constraints

Resources:

Space

Equipment

Personnel

Objectives:

Maximize spaceutilization

Maximize equipmentutilization

Maximize laborutilization

Maximize accessibilityof all materials

Maximize protection ofall materials

Storage and Warehousing SPACEPLANNING: Storage Analysis Chart


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Storage Location Methods


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Dedicated Storage

Each stock keeping unit (SKU) is

assigned a spot

Easy to find and manage

Pick times may be longer

Need overflow areas

Must plan space for maximumon hand

Storage locations can bearbitrarily determined, such aspart number sequence, or theycan be determined based on theSKU's activity level and inventory

level.

Number of storage locations isthe sum of the maximuminventory level for each SKU.

Randomize Storage

SKUs are stored in any

available location

Retrievals are first-in, first-out (FIFO).

Allows for better spaceutilization

Requires good controlsystem

Closest-open-locationrule often used

Space is planned for

average amount of eachSKU

Safety Stock +(Replenishment Qty)

Example


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Can be a substantial difference inwarehouse space requirements!

Example


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Randomize Storage:Dedicated Storage:

Dedicated Storage


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Maximize Throughput

Assign SKUs to storage locations based on the ratio oftheir activity to the number of locations assigned to theSKU.

NOTE: Activity is the number of storages/retrievals perunit time not the quantity of material moved.

Inverse of cube per order

Hit rate

SKU with the highest ranking is assigned to thepreferred openings (i.e., closest to the I/O point).

The Cube-per-Order Index forDedicated Storage


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Smallest value gets best locations

Inverse is the hit rate for a particular location

Logic is that items that have lots of transactionsAND do not take up much space should get thebest locations

Items that either do not have many transaction ORones that take up lots of space should go in theworst locations

Example


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Multiple I/O Points


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Rank order locations using weighted-average dx

Total Dx. for theSlotting

Assignment


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Assignment

Multiply distance

for each cell timethe expectednumber of hits per

time (1/COI).

Storage Layout Planning


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Supermarket Storage

Combination of random and assigned storage.

Class-Based Storage

Hybrid configuration which assigns SKUs to classesbased on their activity-to-space ratios, but usesrandomized storage within the classes.

As 80% of S/R need 20% of space

Bs 15% of S/R need 30% of space

Cs 5% of S/R but need 50% of space

Yields some of the throughput benefits of dedicatedstorage and the space benefits of randomized storage.

If materials enter and leave WH from one I/O pt.

Material Shipped/Received inDifferent Amounts


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Calculate Shipping/Receiving Ratio

S/R = (Trips To Shipping)/(Trips fromReceiving)

S/R1 locate nearer to shipping

S/R=1 does not matter

Proposed Layout


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Layout Planning

Objectives

To utilize spaceeffectively

To provide efficientmaterials handling

To minimize storagecost while providing therequired levels ofservice

To provide maximumflexibility

To provide goodhousekeeping

Principles

Popularity

Similarity

Size

Characteristics

Space Utilization

Storage and Warehousing:Layout Principles


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Popularity

Size

Provide a variety ofstorage location sizesto accommodate a

variety of products.

Utilize adjustable racksor shelves if productand unit load sizes areuncertain or changeperiodically.

Similarity

Items that are receivedand shipped togethershould be storedtogether.

Characteristics

Perishable materials

Oddly shaped items

Crushable items

Hazardous materials

Security of items frompilferage

Compatibility betweenitems

Storage and WarehousingPrinciples: Popularity


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Entrance

and Exit

Fast

Moving

Medium

Moving

SlowMoving

Receive Main Aisle Ship

H

G

F

A

D

C

B

E

Product

Quantity pe

Receipt

Trips to

Receive

Average

Customer

Order Siz

Trips to

Ship

A 40 pallets 40 1.0 pallet 40

B 100 pallets 100 0.4 pallets 250C 800 cartons 200 2.0 cartons 400

D 30 pallets 30 0.7 pallets 43

E 10 pallets 10 0.1 pallets 100

F 200 cartons 67 3.0 cartons 67

G 1000 cartons 250 8.0 cartons 125

H 1000 cartons 250 4.0 cartons 250

Storage and Warehousing: LayoutPrinciples: Space Utilization


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Conservation of Space

Maximizingconcentration

Maximizing cubeutilization

Minimizinghoneycombing

Limitations of Space

Clear height

Stacking height

Floor loading

Columns

Materials Accessibility

Each storage face hasaisle access

Majority of items storedalong the long axis ofthe area

Aisles should not beplaced along wallswithout doors

Avoid locked stock by

using a two-bin system

Storage and Warehousing:Space Utilization


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Loss of Cube

Utilization

Aisle Example

Storage and Warehousing:Space Utilization ...


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Loss of Cube Utilization

Honeycombing

Wasted space that results because a partial row or stack cannot beutilized because adding materials would result in blocked storage.

Space Standard

Volume requirement per unit load stored to include allocatedspace for aisles and honeycombing.

Storage Models


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Determine best design for each storage subsystem

Unit loads stored and retrieved with lift trucks

Four conventional storage methods analyzed

Block stacking

stacked on top of each other

stored on floor in storage lanes

Deep lane storage

Single-deep rack

Double-deep rack

Tradeoff between density of storage and accessibility

Have different types of space losses due to rack design and

honeycombing

Minimize average amount of floor space required



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Equipment Planning

Storage Equipment Types

Bulk Storage

includes block and tight-blocking stacking

Portable Racks or Stackable Racks

Pallet Rack

Cantilever Racks -- provide long uninterrupted spans

Drive-In or Drive-Through Racks

Flow-Through Rack

Bin Racks or Shelving

Sliding Racks


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Order Picking

Order Picking


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A classical problem inwarehousing anddistribution is the orderpicking problem.

Picking several

different items tocompose an order.

Could be a customerorder, delivery for a

retail store, kit formanufacturing orassembly, etc.

Order Picking...


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Processing customer orders (typically done

by the computerized warehousemanagement system of the facility):

checking that the requested material is availableto ship;

if necessary, coordinating order fulfillment withother facilities of the distribution network;

producing the pick lists to guide the orderpicking and the necessary shipping

documentation;

scheduling the order picking and the shippingactivity.

Order Picking ...


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The set of physicalactivities involved in

collecting from the storagearea the materialsnecessary for the fulfillmentof the various customerorders.

~55% of warehouseoperating costs

Activity % Order Picking Time

Traveling 50%

Searching 20%

Pick 15%

Paperwork and OtherActivities 15%

Pick Lists


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Order Picking Objectives


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Productivity (pick rate)

Piece pick operations measure the pick rate in line items

picked per hour

Case pick operations measure cases per hour and line itemsper hour.

Pallet pick operations measure is pallets picked per hour.

Productivity gains are usually in the form of reducing the travel

time.

Cycle Time

Amount of time it takes to get an order from order entry to theshipping dock

Immediate release of orders to the warehouse for picking andmethods that provide concurrent picking of items within largeorders are ways to reduce cycle times.

...


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Accuracy

Does the customer get what they ordered? Affected bymany factors,

product numbering scheme,

design of product labels,

packaging,

picking documents,

location numbering scheme,

storage equipment,

lighting conditions, and

picking method used.

Technology can aid picking accuracy (pick-to-light,scanners)

Principles of Order Picking


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1. Apply Paretos Law

2. Use a clear easy-to-read Picking doc.3. Use a pre-routed, pre-posted picking doc

4. Maintain an effective stock-location system5. Eliminate and combine tasks if possible

Traveling and extracting

Traveling and documenting

Picking and sorting

Picking, sorting, and packing



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6. Batch orders

Procedure Pickers per Order Line Items perPick

Periods per Shift

Discrete Single Single Single

Zone Multiple Single SingleBatch Multiple Single Single

Wave Single Single Multiple

Zone-Batch Multiple Multiple Single

Zone-Wave Multiple Single Multiple

Zone-Batch-Wave

Multiple Multiple Multiple



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7. Establish separate forward and reserve picking areas8. Assign popular items to easily accessible locations

9. Distribute picking activity so as to reduce congestion10. Assign items that are likely to be requested together to the

same or nearby locations11. The order picker should be responsible for order accuracy

12. Avoid counting13. Require pick confirmation14. Design picking vehicles to minimize sorting time and errors

and to enhance pickers comfort

15. Eliminate paperwork from the order picking activity

Single Order Picking


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Product is stored in fixed locationson static shelving or pallet rack.

An order picker picks one orderat a time following a route upand down each aisle until theentire order is picked.

The order picker will usually usesome type of picking cart.

The design of the picking flowshould be such that the orderpicker ends up fairly close to theoriginal starting point.

The picking document shouldhave the picks sorted in thesame sequence as the pickingflow.

Works well in operations witha small total number of ordersand a high number of picksper order.

Operations with low picks perorder will find the travel timeexcessive

Operations with large numbersof orders will find that the

congestion from many pickersworking in the same areasslows down the processing.

Batch Picking


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Multiple orders are groupedinto small batches.

An order picker will pick allorders within the batch inone pass using aconsolidated pick list.

Usually the picker will use amulti-tiered picking cartmaintaining a separate tote orcarton on the cart for eachorder.

Batch sizes usually run from 4to 12 orders per batch

depending on the averagepicks per order in that specificoperation.

In operations with low picks perorder, batch picking can greatlyreduce travel time by allowing the

picker to make additional pickswhile in the same area.

Accuracy can suffer if you do notprevent mixing of orders.

In very busy operations, batchpicking is often used inconjunction with zone picking andautomated material handlingequipment.

In order to get maximumproductivity in batch pickoperations, orders must beaccumulated in the system untilthere are enough similar picks tocreate the batches.

Zone Picking


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The order picking version of theassembly line.

Picking area is broken up intoindividual pick zones.

Order pickers are assigned aspecific zone, and pick itemswithin that zone.

Orders can be moved from onezone to the next as the pickingfrom the previous zone iscompleted (also known as "pick-and-pass"). Or, items can beconsolidated and sorted.

Balance the number of picks fromzone to zone to maintainconsistent flow.

Creating fast pick areas close tothe conveyor is essential inachieving high productivity inzone picking.

Most effective in large operationswith high total numbers of SKUs,high total numbers of orders, andlow to moderate picks per order.

Separate zones also provide forspecialization of picking

techniques such as havingautomated material handlingsystems in one zone and manualhandling in the next.

Wave Picking


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Selected groups of orders are scheduled

for picking at specific time of the day

Usually have multiple pick periodsthroughout a shift.

Useful to coordinate picking, replenishment,and shipping functions

Can be combined in all other methods to

create hybrid picking schemes

Zone-batch-wave picking

Comparison


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Order Picking Problems


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Batching

Group orders into pick lists

Based on priority or item similarity between orders

Sequencing

Sequence items in the pick list

Based on item locations to minimize expected traveldistance in picking tour (total pick time)

Picking tour is a specification of the sequence in whichitems in a specific order will be picked

This problem is prevalent where items must be picked

from both sides of an aisle and the picker cannot reachitems on both sides without changing position

Wide aisles are common to allow two-way traffic, turningaround in the aisle, or product storage with fork lifts

Pick Sequencing


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How picker traverses aisles the route they take

Often difficult to describe a pick routing or sequenceto picker

Easy to tell picker which location is next picked

Difficult to tell picker exact route to take to next pick

Traveling Salesman Problem (TSP)/VRP

S-Shaped strategy

Largest Gap strategy

Bin numbering strategy

The Pick SequencingProblem


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Given a picking list, sequence the visits to thepicking locations so that the overall traveling effort(time) is minimized.

Remarks


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The TSP problem is an NP-complete problem: It can besolved optimally for smallinstances, but in general, it willbe solved through heuristics.

There is a vast literature onTSP and the development of

heuristic algorithms for it (e.g.,Lawler, Lenstra, Rinnooy Kanand Shmoys, The TravelingSalesman Problem: A guidedtour of combinatorial

optimization, John Wiley andSons, 1985).

When the no subtour constraintis removed, the remainingformulation defines a Linear

Assignment Problem (LAP) (whichis an easy one; e.g., theHungarian Algorithm) => Solvingthe corresponding LAP canprovide lower bounds forassessing the sub-optimality of the

solutions provided by the appliedheuristics.

In the considered applicationcontext, the distances cij shouldbe computed based on the

appropriate distance metric; i.e.,rectilinear, Tchebychev, shortestpath

S-Shaped Pick Sequencing


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Any aisle containing at least one item to be picked is traversedentirely

An exception is made for last aisle if number of visited aisles is odd

Aisles where nothing has to be picked are skipped.

Thus aisles are visited in the shape of an S.

The picker thus enters an aisle from one end and leaves the aisle fromthe other end, starting at the left side of the warehouse.

After picking the last item, the order picker returns to the front end of theaisle.

This strategy is used frequently, because it is very simple to use andto understand.

S-shape strategy efficient when

Large number of SKUs per order

When it is time consuming to enter and leave aisles i.e. high bay orderpicking trucks

S-shaped Pick Sequence


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Largest Gap Strategy


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All aisles except first and last are exited on same side entered

How far to go into aisle?

picker enters an aisle as far as the largest gap within an aisle

Gap = distance between any two adjacent picks, distance between thefirst pick and the front aisle, or distance between the last pick and theback aisle

The largest gap is the part of the aisle that is not visited by theorder picker.

If the largest gap is between two adjacent picks, the picker performsa return route from both ends of the aisle.

Otherwise, a return route from either the front or back aisle is used.

The largest gap within an aisle is therefore the portion of the aislethat the picker does not traverse.

Largest Gap strategy works well when

The number of picks per aisle (pick density per aisle) is low

The additional time to change aisles is short.

Largest Gap Pick Sequence


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S-Shape Heuristic The order picking route starts at the depot


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The order picking route starts at the depot.

It goes to the front of the main aisle closest to thedepot, that contains at least one item (1).

This main aisle is traversed up to and including

the block farthest from the depot, that contains atleast one item (2).

If the current block contains at least one item: Goto the left most aisle containing items or go to theright most aisle containing items, whichever is theclosest (3);

go from one aisle to the next and traverse any

aisle containing items entirely; after picking thelast item, return to the front of the block (4).

If this block contains no items: Traverse the aisleof this block, that is closest to the currentposition.

Repeat this procedure for all blocks until theblock closest to the depot has been considered(5).

Finally, return to the depot.

Largest Gap heuristic


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the order picking route starts at the depot; it goes to the frontof the main aisle closest to the depot, that contains at leastone item; traverses this main aisle up to and including theblock farthest from the depot that contains at least one item

(1).

On traversing the cross aisle (the rear aisle), each aisle isentered as far as the largest gap and left from the sameside that it was entered (2).

A gap represents the distance between any two adjacentitems, or between a cross aisle and the nearest item. Thus,the largest gap is the part of the aisle that is not traversed.

The last aisle of the block is traversed entirely, by which we

arrive in the next cross aisle (3).

This cross aisle is traversed, while visiting the aisles of theblocks on both sides of the cross aisle up to the largest gap.First the aisles on one side of the cross aisle are visited (4)and thereafter the aisles on the other side (5).

One aisle is again traversed entirely to reach the next crossaisle (6). This may be either the left or the right most aislecontaining items, depending on which of the two gives theshortest travel distance within the cross aisle.

This process is repeated for all blocks containing items.

If a block does not contain items, then the aisle of this block,that is closest to the current position is traversed entirely.After considering the last block, return to the depot (7).

Aisle-by-Aisle Heuristic


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This heuristic is described inVaughan and Petersen (1999).Basically,

Every main aisle is visited once.

The order pickers starts at thedepot and goes to the left mostaisle containing items. All items inthis main aisle are picked and

A cross aisle is chosen to proceedto the next main aisle.

Again all items in this main aisleare picked and the order pickersproceeds to the next main aisle.

The aisle-by-aisle heuristic

determines which cross aisles touse to go from one aisle to thenext in such a way that thedistances traveled are minimized.

Interactive Warehouse


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http://www.roodbergen.com/warehouse/

Crossdocking
http://www.roodbergen.com/warehouse/http://www.roodbergen.com/warehouse/http://www.roodbergen.com/warehouse/http://www.roodbergen.com/warehouse/http://www.roodbergen.com/warehouse/


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Eliminates the inventory-holding function of awarehouse

Allows it to serve itsconsolidation and shippingfunctions

Transfer incoming shipmentsdirectly to outgoing trailerswithout storing them

Arriving goods from thevendor already have acustomer assigned

Workers only move theshipment from the inboundtrailer to an outbound trailerbound for the appropriatedestination.

Eliminates expensivefunctions of inventory holdingand order picking but requires

information systeminfrastructure in modernsupply chains.

Shipments typically spend lessthan 24 hours at the facility,

sometimes less than an hour=> Just-In-Time for distribution

Examples


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Home Depot operates a pre-distribution crossdock in Philadelphiaserving more than 100 stores in the Northeast area.

Wal-Mart uses

traditional warehousing for staple stock - i.e., items that customers areexpected to find in the same place in every Wal-Mart (e.g., toothpaste,shampoo, etc.)

crossdocking for direct ship - i.e., items that Wal-Mart buyers have gotten

a great deal on and are pushing out to the stores

Costco uses pallet-based post-distribution crossdocking

Computer firms like Dell consolidate the major computer componentsin merge in transit centers.

JIT manufacturers consolidate inbound supplies in a nearby

warehouse

LTL and package carriers (UPS, FedEx) crossdock to consolidatefreight

Optimizing the CrossdockPerformance


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The major operational cost for crossdock is the labor.

Hence, the system performance is optimized by seeking to

maximize the throughput of the crossdock operations byestablishing an efficient freight flow.

Factors affecting the freight flow:

Long term decisions:

Number of doors and shape of the building

Employed material handling systems

parking facilities

Medium term decisions:

Crossdock layout, i.e., the characterization of the various doors asstrip or stack doors, and the assignment of specific destinations to

the stack doors

Short term decisions

Inbound Trailer Scheduling

Doors and Parking


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Number of stack doors:

determined by the volume of freight moved to each customer,

and any potential delivery schedules

Number of strip doors:

since trailer unloading is a faster job than trailer loading, acommon rule of thumb is to have twice as many stack doors asstrip doors, so that you balance the incoming with the outgoing

flow.

In general the larger the number of doors in the crossdock, thelarger the distances that must be traveled.

The parking lot should provide parking space for two trailersper door, so any flow surges can be accommodated withoutconsiderable problems.

Shape


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Corners are bad! Specifically:

Internal corners take away door locations (about 8 doorsper corner)

External corners take away storage space in front of thedoor (w/2 doors worth of floor space)

But min corners increases travel distance and congestionat centrally located doors

Suggested building shapes:

I for small crossdocks (up to 150 doors)

T for medium size crossdocks (between 150-250 doors)

X or H for the largest crossdocks (above 250 doors)

Frequently, the building shape is constrained

Crossdock Layout


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In general, centrally located doors should bereserved for the unloading activity and fordestination with large outgoing flows.

On the other hand, if the freight on eachinbound trailer is destined to a small andstable set of customers, then the facility canbe decongested by establishing distinct hubs

serving clusters of destinations that tend tohave their freight on the same incomingtrailers.

Crossdock Layout ...


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Two extensively used heuristics are:

the block heuristic:

Assign first the unloading activity to the best doors (i.e. thedoors having the smallest average distances to all otherdoors).

Subsequently, assign the remaining doors to outbound

destinations, prioritizing them in decreasing order of theirflow intensities

the alternating heuristic:

The door assignment alternates between a strip door and a

stack door to the destination with the next highest flow

The alternating heuristic produces solutions that are typically10% better than the solutions produced by the blockheuristic.

I-shape CrossdockRoadway Express crossdock in Chicago Heights, IL


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T-shape CrossdockAmerican Freightways crossdock in Atlanta


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July 11, 2010 Dr. Erkan BAyraktar 90T is best shape for medium/large crossdocks

H-shape CrossdockCentral Freight crossdock in Dallas; the largest LTL dock in the world -550doors


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July 11, 2010 Dr. Erkan BAyraktar 91H is best shape for very large crossdocks

Order Picking Equipment


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Static shelving

FP II Single

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