An enhanced storage location assignment policy by minimizing handling cost for warehouse XYZ

In recent years, the increase in time-based competition has put pressure on managers to reduce the costs of warehouse design and management activities. It is important to determine the most profitable storage location assignment policy to be implement in the warehouse since it influence almost all the warehouse performance. Hence, the objective of this research is minimizing total handling cost using class-based storage policy with combined closest open location storage policy within each class. A model which represent the class-based storage location assignment with closest open location storage policy are proposed to minimize the storage total travel distance thus minimizing total handling cost. Most previous related studies on warehouse only considered the floor level of storage location. In order to fully utilize the storage space, the model will considered the number of level at each storage location for storage of unit load (pallet). Computational experiment using one-month collected data from selected warehouse XYZ are based on 95 storage locations with the implementation of three classes. A result further observed that the proposed model contributes in reduction of total handling cost compared to the classical class-based storage location assignment policy with random open location.