1

INTERNATIONAL UNIVERSITY
Major : Logistics and Supply Chain Management
Instructor : Nguyen Hoang Huy
Subject : Warehouse engineering management

PATAYA FOOD INDUSTRIES

LTD:
A WAREHOUSE CASE STUDY
GROUP PROJECT 3

Luong Bao Han IELSIU17003

Nguyen Hai Yen Ly IELSIU17119
Le My Tra My IELSIU17120
Nguyen Nhat Quan IELSIU17107 1
Nguyen Minh Tri IELSIU17110
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OUTLINE
01 Introduction
Warehouse
02
processes
Storage and handling
03
equipment
Warehouse
health and 04
safety
Order – picking
05
system
Aggregate planning
06
model for inventory
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0
Introductio
n
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Warehouse
Introduction

History and location

Established in 1999
Located in Tra Noc 1
Industrial Park, Can
Tho City

Main purpose

Add value to the region's rich

agricultural and fishery
resources:
Shellfish and sardine
productions.

http://xaydunghatangkcncantho.com/cty-thue-lai-dat/320-cty-cn-thu%C3%8C%C2%A
3c-pha%C3%8C%E2%80%B0m-pataya-vn.html
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4 PRODUCT GROUPS

Raw Materials (RM)

Ingredients: additives
and veggies (ING)

Packagings: primary
and secondary (PKG)

Finished Goods (FG)

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0
Warehouse
Processes
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WAREHOUSE OPERATION
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RECEIPT
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STORAGE
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SHIPMENT
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0
Storage and handling
equipment
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STORAGE AND HANDLING

EQUIPMENT

N
Types of
o Name of equipment Quantity
equipment
.
Handling 1 Live (powered) roller conveyor 2
equipment 2 Chain conveyor 2
3 Slat conveyor 2
4 Forklift (fork truck) 10
5 Turntable 10
6 Barcode system 1
7 Thermometer 12
Storage 8 Selective pallet rack 8
equipment 9 Drive-through rack 8
1
Plastic crate 100
0
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0
Warehouse health
and safety
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WAREHOUSE HEALTH AND SAFETY

Manual handling
Forklift truck Fire safety

  
15
https://www.pennyhydraulics
.com/help-guides/manual-han https://www.indiamart.com/p
dling-guidelines-safe-manua roddetail/fire-safety-poste https://www.creativesafetysupply.c
l-lifting-at-work/ r-14976189488.html om/articles/forklift-safetytips/
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0
Order – picking
system
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PROBLEMS
Still reliant on paper-based
picking

Has not applied a proper routing

strategy when picking the
products

No designated place for half-

picked orders
20
https://www.youtube.com/watch?v=FTtAc9qKWL8
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MODEL DESCRIPTION

•   The below model is based upon the formulations of the traveling salesman
problem (TSP) and the bin packing problem (BPP)
• A variation should be considered. The decision variable takes on a binary value
of 0 or 1 depending on whether or not the location k is visited immediately after
the location I in an order picking sequence of a batch B.
• If it is assumed that n orders are arrived, the number of batches is n at the worst
case, and the minimum number of batches is n/C. The objective function
minimizes the total picking time of tours or batches and holding time of orders of
the tour. and represent picking factor and holding factor, respectively. They give
weights on each component.
• If and then the above formulation minimizes only the picking time of a batch.
• If and then it tries to minimize the order holding time of a batch.
• By giving proper values to each factor depending upon the warehouse system,
e.g., and , the model can reflect the efficiency of the warehousing system and
the response of customer orders.
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CONSTRAINTS
DESCRIPTION

• Constraints (1) and (2) represent that each arc in a tour or batch has exactly
two endpoints, i.e., one on either side of it.
• Constraint (3) is a sub-tour elimination constraint or no sub-tour allowed in
each batch. In other words, the optimal solution must only have one tour
connecting all the points in one batch. The fourth constraint represents that
the distance metric is the Tchebyshev metric. It has two independent motors
for horizontal and vertical direction.
• Constraint (5) computes order holding time within a batch.
• Constraint (6) specifies that because the picker or retrieval vehicle has its
capacity it cannot exceed its maximum items to be retrieved.
• Constraint (7) represents the relationship of the number of locations visited in
a tour or batch and the sum of items in the orders of a batch.
• Finally, constraint (8) ensures one order should be included in a batch B.
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MODEL INPUT

 • k, I: index for bin locations to be visited in a tour or batch

• h, v: horizontal and vertical speed of a vehicle
• (xk, yk): coordinates of bin location k
• uk, ul: arbitrary real numbers for location k and I
• B: index for batch
• ak: arrival time of order k
• hj: order holding time of job j in a batch B
• C: vehicle capacity
• wk: number of items in order k
• : picking factor for order picking,
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DECISION VARIABLES

  = 
 =
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MODEL
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Order Order Numb Order Numb
Order Order Order
numb arrival er of arrival er of
alias number alias
er time items time items

RAW
1 1 9:01 4 16 G 9:32 4
2 2 9:02 4 17 H 9:32 5
3 3 9:04 2 18 I 9:36 4
4
5
6
4
5
6
9:06
9:09
9:13
3
4
2
19
20
21
K
J

L
9:38
9:39
9:41
2
2
1
ORDER
7
8
7
8
9:18
9:18
5
4
22
23
M
N
9:41
9:45
5
2 DATA
9 9 9:19 1 24 O 9:49 3
10 A 9:21 5 25 P 9:52 2
11 B 9:21 5 26 Q 9:53 1
12 C 9:23 4 27 R 9:54 2
13 D 9:25 3 28 S 9:55 3
14 E 9:25 5 29 T 9:56 5
15 F 9:26 3 30 U 9:59 3 Batch PT HT RT
1 59.3 234.0 293.3
2 42.7 298.0 340.7
3 48.3 231.0 279.3

RESULT 4
Total
14.1
164.4
69.0
832.0
83.1
996.4
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0
Aggregate planning
model for inventory
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AGGREGATE PLANNING MODEL

Item Cost
Demand Material cost $10/unit
Month
Forecast Inventory holding cost $2/unit/month
January 1,600 Marginal cost of
February 3,000 $5/unit/month
stockout/backlog
March 3,200 Hiring and training costs $300/worker
April 3,800 Layoff cost $500/worker
May 2,200 Labor hours required 4/unit
June 2,200 Regular time cost $4/hour
Overtime cost $6/hour
Cost of subcontracting $30/unit

Table 1. Table 2.

Demand forecast at Pataya warehouse Cost of workforce in Pataya warehouse

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DECISION VARIABLES:

Wt = workforce size for Month t, t = 1, …, 6

Ht = number of employees hired at the beginning of Month t, t = 1, …, 6
Lt = number of employees laid off at the beginning of Month t, t =1, …, 6
Pt = number of units produced in Month t, t =1, …, 6
It = inventory at the end of Month t, t =1, …, 6
St = number of units stocked out/backlogged at the end of Month t, t = 1, …, 6
Ct = number of units subcontracted for Month t, t = 1, …,6
Ot = number of overtime hours worked in Month t, t = 1, …, 6
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OBJECTIVE FUNCTION

 
Minimize the following components:
Regular-time labor cost =
Overtime labor cost =
Cost of hiring and layoff =
Cost of holding inventory and stocking out =
Cost of materials and subcontracting =
+ + + +
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CONSTRAINTS

 1. Workforce, hiring, and layoff constraints

Wt = Wt - 1 + Ht - Lt for t = 1, …, 6
2. Capacity constraints

Pt ≤ 40Wt + for t = 1, …, 6
3. Inventory balance constraints
It - 1 + Pt + Ct = Dt + St - 1 + It - St for t = 1, …, 6
4. Overtime limit constraints

Ot – 10Wt ≤ 0 for t = 1, …, 6
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Total cost over planning inventory horizon = $422,660

No.
No. Total
Laid Workforc Overtim Inventory Stockout Subcontrac Deman
Period t Hired Productio
Off, e Size, Wt e, Ot , It , St t, Ct d, Dt
, Ht n, Pt
Lt

0 0 0 80 0 1,000 0 0    
1 0 16 64 0 1,960 0 0 2,560 1,600
2 0 0 64 0 1,520 0 0 2,560 3,000
3 0 0 64 0 880 0 0 2,560 3,200
4 0 0 64 0 0 220 140 2,560 3,800
5 0 0 64 0 140 0 0 2,560 2,200
6 0 0 64 0 550 0 0 2,560 2,200
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REFERENCES
1. Rene & Nima. (2012). Determining the Number of Zones in a Pick-and-sort Order Picking System” by Rene and
Nima Zaerpour. Retrieved from:
https://www.researchgate.net/publication/254308052_Determining_the_Number_of_Zones_in_a_Pick-and-sort_O
rder_Picking_System

2. René B. M. De Koster, Andrew L. Johnson & Debjit Roy. (2012). Warehouse design and management. New Jersey.

3. James Tompskin & Jerry D.Smith. (2013). The Warehouse Management Handbook. (p.230 & p.235).

4. Michale ten Hompel & Thorsten Schmidt. (2007). Warehouse Management: Automation and Organisation of
Warehouse and Order Picking Systems. New York: Springer Berlin Heidelberg.

5. Gwynne Richards. (2014). Warehouse Management: a complete guide to improving efficiency and minimizing
costs in the modern warehouse (2 nd ed.). Kogan Page Limited.

6. Sunil Chopra & Peter Meindl. (2016). Supply Chain Management: strategy, planning and operation (6 th ed.).
United State of America: Pearson Education.

7. John J.Bartholdi, III & Steven T.Hackman. (August 19, 2014). Warehouse & Distribution science. United State of
America.
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Contribution

20% each member

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THANK YOU
FOR LISTENING
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Q&A
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