Supermarket warehouses: stocking policies optimization in an assembly-to-order environment

In modern assembly-to-order systems, sub-assemblies warehouse locations, dimensions, and supply are critical decisional variables. Persona et al. (Int J Prod Econ 110(1-2):147-159, 2007) affirm the structural diversity between assembly parts can largely influence the stocking policies. On the other hand, Zhang et al. (2007) and Hsu et al. (Nav Res Logist 54(5):510-523, 2007) substantiate that the problem gets more complex when it comes to choosing the correct physical locations for common assembly parts. The study at hand concentrates on components warehouse centralization/decentralization choices in an assembly-to-order (ATO) environment, which typically supplies the assembly systems with components' kits through decentralized warehouses called Supermarkets. Specifically, this paper applies an innovative step-by-step procedure to support materials management decision-making policies in order to define when, how, and where it is convenient to install a supermarket warehouse, considering the typical aspect of an ATO environment: number, type, position of the assembly systems, demand rate and commonality degree of components used, internal transportation equipment and transportation costs, load unit capacity, space cost for stocking, space availability in the plant, inventory costs, and safety stock dimension.