A Mathematical Model for Optimal Partitions of Warehouse Storage Space Based on Turnover Density

The class-based storage policy distributes products among a number of classes and reserves a region for each class within the storage area. Most methods that partition a warehouse space into storage classes use product ranking based on their turnovers. These turnover based allocations are optimal only under restricted inventory policies. We use a modified version of an ABC curve based on turnover density as proposed in to overcome this limitation and develop a continuous model for optimally partitioning a warehouse space into 2- and 3-classes. Our computation results on randomly generated problem instances indicate that 2- and 3-class solutions using ranking of products in non-increasing turnover density cover a significant extent of the maximum theoretical improvement possible using full turnover density assignment.