Including operational costs in warehouse location problems: A case study in USA
There is vast research on particular aspects of warehouse design - layout, material handling, order picking, and operating policies - when, in fact, the decisions involved in the process are interrelated. In this paper, we develop an engineering economics framework for warehouse operations that dec...
| Main Authors: | , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
Universidad de Antioquia
2023-11-01
|
| Series: | Revista Facultad de Ingeniería Universidad de Antioquia |
| Subjects: | |
| Online Access: | https://revistas.udea.edu.co/index.php/ingenieria/article/view/350806 |
| _version_ | 1827735310922940416 |
|---|---|
| author | Luis Felipe Cardona Leonardo Rivera-Cadavid |
| author_facet | Luis Felipe Cardona Leonardo Rivera-Cadavid |
| author_sort | Luis Felipe Cardona |
| collection | DOAJ |
| description |
There is vast research on particular aspects of warehouse design - layout, material handling, order picking, and operating policies - when, in fact, the decisions involved in the process are interrelated. In this paper, we develop an engineering economics framework for warehouse operations that decomposes the cost structure of the operation and lays out the relationships between them. Our framework decomposes operational costs into four exogenous characteristics (wages, leasing costs, cost of capital, and access to technology) that depend on the geographic location of the warehouse and two operational requirements (throughput and storage capacity). Using these six parameters, and publicly available information, practitioners can estimate the total operational cost of the warehouse for potential locations in facility location analysis, which have been traditionally limited to transportation costs. In our case study, we use our framework to establish a rank of preferable warehouse locations in terms of operational costs among logistics clusters in the United States of America.
|
| first_indexed | 2024-03-11T01:49:14Z |
| format | Article |
| id | doaj.art-934a505de006433c8e3f1847d2705d0f |
| institution | Directory Open Access Journal |
| issn | 0120-6230 2422-2844 |
| language | English |
| last_indexed | 2024-03-11T01:49:14Z |
| publishDate | 2023-11-01 |
| publisher | Universidad de Antioquia |
| record_format | Article |
| series | Revista Facultad de Ingeniería Universidad de Antioquia |
| spelling | doaj.art-934a505de006433c8e3f1847d2705d0f2023-11-18T13:27:50ZengUniversidad de AntioquiaRevista Facultad de Ingeniería Universidad de Antioquia0120-62302422-28442023-11-0110.17533/udea.redin.20231132Including operational costs in warehouse location problems: A case study in USALuis Felipe Cardona0Leonardo Rivera-Cadavid1University of LouisvilleUniversidad del Valle There is vast research on particular aspects of warehouse design - layout, material handling, order picking, and operating policies - when, in fact, the decisions involved in the process are interrelated. In this paper, we develop an engineering economics framework for warehouse operations that decomposes the cost structure of the operation and lays out the relationships between them. Our framework decomposes operational costs into four exogenous characteristics (wages, leasing costs, cost of capital, and access to technology) that depend on the geographic location of the warehouse and two operational requirements (throughput and storage capacity). Using these six parameters, and publicly available information, practitioners can estimate the total operational cost of the warehouse for potential locations in facility location analysis, which have been traditionally limited to transportation costs. In our case study, we use our framework to establish a rank of preferable warehouse locations in terms of operational costs among logistics clusters in the United States of America. https://revistas.udea.edu.co/index.php/ingenieria/article/view/350806Economic evaluationsystems designoptimizationmanagement operations |
| spellingShingle | Luis Felipe Cardona Leonardo Rivera-Cadavid Including operational costs in warehouse location problems: A case study in USA Revista Facultad de Ingeniería Universidad de Antioquia Economic evaluation systems design optimization management operations |
| title | Including operational costs in warehouse location problems: A case study in USA |
| title_full | Including operational costs in warehouse location problems: A case study in USA |
| title_fullStr | Including operational costs in warehouse location problems: A case study in USA |
| title_full_unstemmed | Including operational costs in warehouse location problems: A case study in USA |
| title_short | Including operational costs in warehouse location problems: A case study in USA |
| title_sort | including operational costs in warehouse location problems a case study in usa |
| topic | Economic evaluation systems design optimization management operations |
| url | https://revistas.udea.edu.co/index.php/ingenieria/article/view/350806 |
| work_keys_str_mv | AT luisfelipecardona includingoperationalcostsinwarehouselocationproblemsacasestudyinusa AT leonardoriveracadavid includingoperationalcostsinwarehouselocationproblemsacasestudyinusa |