Professional Documents
Culture Documents
Jsir 66 (4) (2007) 325-329 PDF
Jsir 66 (4) (2007) 325-329 PDF
Jsir 66 (4) (2007) 325-329 PDF
This paper attempts to find out the best available alternative material handling system (MHS), an integral component of
warehouse operations. Analytic Hierarchy Process (AHP), a flexible decision making tool for complex, multi-criteria
problems and useful to provide management weightage, has been used in this study to develop performance model. The
proposed algorithm, used to select the proper MHS is the hybrid of AHP performance model and capital investment.
Sensitivity analysis has also been reported for making an eclectic decision. The newly developed method is sound surrogate
to the traditional techniques.
Keywords: Analytic Hierarchy Process (AHP), Material-handling system (MHS), Performance model, Sensitivity analysis
proposed algorithm to get the final result and provides where 0 ≤ β ≤ 1 and β is known as coefficient of
a more consistent weighing scheme for the final attitude. Also, 0 ≤ CFMi ≤ 1 and CFMi = Composite
selection of MHS. This concept is rational, logical, factor measures for i th alternative.
exotic and comprehensive; simple calculations are CFMs are score obtained from AHP performance
performed to judge and compare the performance of model for each alternative.
the alternatives. n
∑ CFMi = 1
Methodology i =1
Results from PM interface with capital investment
in the proposed algorithm. MHEM is calculated from Also, 0 ≤ OFMi ≤ 1, OFMi = Objective factor
proposed algorithm to determine final score for each measure for ith alternative and calculated as
alternative MHS. To verify effectiveness of final
n
outcome of the present methodology, sensitivity
∑ OFMi = 1
analysis is performed.
i =1
AHP Performance Model9
n
Objective of PM is to choose the best available OFMi = [AFCi x ∑ 1 / AFCi ]-1 …(2)
alternative with respect to performance using AHP to i =1
improve functioning during usage of MHS. If an
AFCi = Alternative factor cost for ith alternative,
investments decision is taken without considering
i.e capital investment required for ith alternative.
performance measures, intangible benefits cannot be
To verify the result of proposed algorithm,
quantified in the decision process. PM establishes
sensitivity analysis is carried out by changing the
relationship between investment alternatives,
value of β in Eq (1).
performance measures, activities and goals, where
strategic goals are attributed, activities and Case Study
performance measures are sub attributes. Priority As a response to changing business scenario,
weights are obtained using pairwise comparison of management has decided to replace the old MHS to
AHP (Fig. 1). meet certain strategic goals. Strategic goals as
Performance measures such as lead-time, transit capacity, user friendliness, productivity and safety are
damage, man-hours per product and energy per hour used to evaluate three different new MHS coded A, B
are considered while developing PM. Under man- and C. The study was conducted for an electrical
hours per product, both maintenance man-hours and goods manufacturing firm. To hide the identity, name
materials transportation man-hours are considered. of the organization and name of the alternates will not
This provides an effect of running cost on investment be discussed. In this paper, all the cost calculations
alternatives. By traditional experience or from product are on Indian Currency (Rs).
related information supplied by the manufacturer,
operating cost or resource usage for each type of AHP Performance Model
investment alternative can be compared. These To evaluate the alternatives, performance measures
estimates are considered while assigning weightage to are chosen in consultation with management.
the alternatives into PM. After assigning all the Activities identified for MHS selection are incoming
priority weights, weights are multiplied along each transportation and storage, pick up and final delivery.
path leading to an alternative and add those to arrive Transportation of incoming materials involves pick up
at the final score of PM. from a designated place and transportation to a
designated storage place and storage. Transportation
Proposed Algorithm of final delivery includes pick up stored materials to
Consider a warehouse where, i = 1, 2,………, n; be dispatched and transport to a designated place for
number of material handling alternatives considered delivery. Using pairwise comparison of AHP
for proposed analysis. MHEM for ith alternative can technique, priority weights for strategic goals,
be calculated as activities and performance measures are developed.
Steps for calculation of relative importance under the
MHEMi = β (CFMi) + (1- β) (OFMi) …(1) MHS ‘A’ are,
CHAKRABORTY et al: MATERIAL HANDLING SYSTEM FOR A WAREHOUSE 327
First calculate up to incoming and store activity Then the relative importance for MHS ‘A’ can be
calculated as
0.15x0.5 + 0.35x0.4 + 0.25x0.4 + 0.25x0.5 = 0.44.
Up to pick and delivery activity (0.44x0.1x0.4 + 0.44x0.3x0.4 + 0.44x0.25x0.3 +
0.44x0.35x0.3) + (0.56x0.2x0.4 + 0.56x0.25x0.4 +
0.15x0.5 + 0.35x0.6 + 0.25x0.6 + 0.25x0.5 = 0.56 0.56x0.3x0.3 + 0.56x0.25x0.3)= 0.343
328 J SCI IND RES VOL 66 APRIL 2007
5 Ioannou G & Sullivan G, Use of activity based costing and hierarchy process techniques, Int J Prod Res, 34 (1996)
economic value analysis for the justification of capital 1331-1345.
investment in automated material handling systems, Int J 10 Chakraborty P S, Majumder G & Sarkar B, Performance
Prod Res, 37 (1999) 2109-2134. evaluation of existing vendors using Analytic Hierarchy
6 Paulo J, Lashkari R S & Dutta S P, Operation allocation and Process, J Sci Ind Res, 65 (2005) 648-652.
materials-handling system selection in a flexible 11 Sarkar B, Choudhary J P & Mukherjee S K, Selection of
manufacturing system: a sequential modeling approach, Int J professionals using Analytic Hierarchy approach, J Inst Eng
Prod Res, 40 (2002) 7-35. (India), Interdis Div, (2000) 16-18.
7 Saaty T L, The Analytical Hierarchy Process (Mc Graw Hill, 12 Mustafa Y & Yusuf T, AHP approach in the credit
New York) 1980. evaluation of the manufacturing firms in Turkey, Int J Prod
8 Chan L Y & Lynn B E, Hierarchical analysis as a means of Econ, 88 (2004) 269-289.
evaluating tangibles and intangibles of capital investments, 13 Bhattacharya A, Sarkar B & Mukherjee S K, A new
Mid-Atlan J Busi, 29 (1993) 59-74. method for plant location selection: a holistic approach.
9 Angelis D I & Lee C Y, Strategic investment analysis Int J Indu Enginee: Theo Applic & Prac, 11 (2004) 330-
using activity based costing concepts and analytical 338