Transportation Warehousing

1
Transportation / Warehousing

• Transportation Decisions
• Warehousing Decisions
• Coordination Techniques
• Data Aggregation

2
Data Aggregation

• Aggregation
• Data is typically aggregated in some manner to
  make problem tractable.
• Customer proximity, distribution routes, product
  type, zip codes, other,
• Challenge is to maintain data integrity.
• Allows for more effective forecasting techniques.

3
Transportation

• Place utility
• products are delivered to the desired location
• Time utility
• products are delivered at the right time

4
Transportation Decisions

• Modes
• Trucking, Rail, Water, Air, Pipeline
• Intermodal
• Container usage
• In-house vs. outsourcing (3PL)

5
Transportation Modes
6
Trucking Modes

• Ranked by cost

Most Expensive
Expedited LTL Consolidation Partials Milkruns TL
Least Expensive
7
Warehousing Decisions

• The appropriate number of warehouses
• The location of each warehouse
• The size of each warehouse
• Allocate warehouse space for each product
• Determine which products customers will received
  from which warehouse

8
Warehouse costs

• Storage costs
• Inventory holding costs
• Handling costs
• Labor and utility which are proportional to
  annual flows through warehouse
• Fixed costs
• Other costs that are not proportional to
  inventories. (may include aspects of labor,
  utility, etc.)

9
Warehouse capacity

• Ability to meet peak demand as opposed to average
  demand
• Capacity allows for aisles, picking, sorting,
  AGVs, etc.,
• Rule of thumb is to take peak space (double
  inventory turnover ratio) area for one unit
  space factor. Typical space factor used is three.