Abstract
Many Automotive firms are increasingly striving to reduce supply chain costs because of today's competition. Warehousing is one of the most important activities that impact on supply chain costs. Order picking is a major costly element of the warehouse operations for assembly supply warehouse of automotive factories. The largest target for reducing the cost of warehouse operations is to reduce the pick travel distances or pick travel times. This target can be achieved by optimum storage location assignment. In recent years, most researches have focussed on the development of pick travel distance or pick travel time models for various storage assignment, vehicle routing and order batching strategies. In this study, the mathematical model of the location assignment optimization was developed for an automotive factory. The aim of our model is to minimize total time for storing and order picking with consideration of assembly materials' class weights. This model was coded using GAMS and run through different scenarios for automotive assembly supply warehouse. Optimal solutions were computed for each scenario. This paper demonstrated that developed model can be used by similar automotive manufacturers' warehouses effectively to reduce their supply chain costs.
KEYWORDS - assembly supply warehouse, optimization, storage assignment, order picking, supply chain costs