Identifying critical variables of warehouses performance under highly seasonal demand using system dynamics

Abstract

ABSTRACT : This research aims to identify the variables having the greatest influence on the performance of a warehouse with a picker-to-parts storage system in a scenario of high seasonal demand and products with short- and long-life cycles simultaneously. Systems dynamics and statistical screening were used to address this situation from a systemic point of view. The main results show that the picking percentage and the receipt percentage on pallets are the dominating parameters driving the warehouse's total operating cost. Contrarily, the cross-docking percentage and, the shipment percentage on pallets do not significantly affect the total operating cost. Using the data of a Colombian warehouse as a case study, the best values of the different parameters lead to a total operating cost reduction of 38% compared to the case base scenario; if the effect of the season is eliminated, it decreases to 41%, but if the flow of the season doubles, it decreases by 21%. The reductions in the total operating cost are generated by the reduction of the penalties in each process under the best values of each parameter. By contrast, the receipt percentage on pallets, picking percentage, cross-docking percentage and, shipment percentage, do not affect the fill rate of receipt and shipment within the uncertainty ranges analyzed.