The simplest, most typical operating protocols are expressed in the following assumptions:
Assumption 7.1 (Storage policies). All locations in the forward area are reserved locations to which specific SKUs will be assigned, while all overstock locations will be shared storage.
Reserved (dedicated) storage is employed in the forward pick area to support rapid order-picking. When storage is reserved, it can be assigned based on activity rather than mere availability, and order-pickers can more easily learn where product is. Even though reserved storage is not the most space-efficient, this does not cost much because the forward pick area is typically a relatively small part of the warehouse. The reserve area is generally devoted to bulk storage and is much larger. Using shared storage in the reserve area ensures high space utilization in most of the warehouse.
Assumption 7.2 (Active pick locations). At any time each SKU has a single location from which to pick less-than-pallet quantities; furthermore, that location will remain within a single area, either forward or reserve.
If a SKU has pallets in both the forward and reserve areas, it makes economic sense to pick full-pallet quantities from reserve: If we were to take a full pallet from the forward area, it must be replenished from reserve, and this entails three trips, one to retrieve the pallet from within the forward area, one to retrieve a replacement pallet from reserve, and one to put the replacement pallet in the newly-available location forward. It is clearly more efficient to fill such an order by retrieving a full-pallet from reserve.
When a ground level pallet location is emptied then a high-reach forklift is dispatched to find a pallet of the same SKU from above and restock the now empty ground location. Because pallet moves are unit-load moves, the work to restock a
SKU assigned to the ground floor is proportional to the total number of pallets moved through the fast-pick area. Thus, for a SKU that has some pallets on the ground floor and some in reserve, the number of restocks is estimated by the total demand due to less-than-full-pallet picks. Full-pallet picks generate no restocks because either they are picked from reserve (which is not restocked internally) or else, if they are picked from a forward location, this must be because all of the SKU is forward and again there are no restocks.
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