Inbound container queuing optimization model for distribution centers

Abstract

Large, multi-national retailers have massive, worldwide supply chain networks which move product from a supplier to the end consumer. During the product's transit from a factory to a regional distribution center, customers may change or cancel their order, or the planned arrival date of the product at the distribution center may change. These products are packed in containers and arrive at the distribution center daily. Each day, humans may make decisions of which containers will be received at a distribution center and there are opportunity costs associated with selecting the wrong container to receive, namely, that the distribution center will become filled with product which is not immediately needed to meet outbound demand. This thesis analyzes one method of receiving containers at a distribution center and the impacts it has on satisfying customers' orders. A model for a lean inventory management system and a container selection optimization model are described in it. Representative data is presented and the model is used to solve which containers should be received. Finally, the efficacy of the model and a comparison to a heuristic are discussed.