Excess warehouse space allocation for cost reduction and customer service improvement

Faizul Huq, M. Khurrum S. Bhutta and Ken Cutright

International Journal of Business Continuity and Risk Management, 2015, vol. 6, issue 1, 68-76

Abstract: This paper proposes a heuristic approach to solving the problem of allocating surplus shelf and floor space in warehouses for the purpose of improving customer service as well as reducing costs. Frequently warehouse managers find themselves with surplus space and it may be possible to improve customer service and reduce costs by relocating some of the items to the surplus space. This may be particularly true after the receipt of a new shipment. In addition to relocating items in the primary warehouse, this paper also considers relocating items from secondary storage locations. A case study is presented to demonstrate the efficiency of the proposed approach and results are encouraging.

Keywords: warehousing; stock keeping units; SKUs; pallet space; EOQ; economic order quantity; customer service; excess space; warehouse space; space allocation; cost reduction; service improvement; secondary storage; item relocation. (search for similar items in EconPapers)
Date: 2015
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