Warehouse optimization using generalized reduced gradient (GRG) method

Abstract

The constant changes in consumer demand, competition and challenges with the current pandemic situation would change the dynamics of the supply chain. Thus, in order to remain competitive, the challenge would be the ability to adjust by taking the right decisions at the right time in all nodes of the supply chain. Periodic optimization of the warehouse can contribute to this immensely. But, this needs to be done considering the limitations of the infrastructure of the facility as well as using a method that can be easily and timely used. Hence, the objective of this paper is to develop a model to optimize the warehouse operation using Generalized Reduced Gradient (GRG) Nonlinear modeling approach considering the existing constraints. The approach of the study would be to identify the variables and constraints involve in re-designing a warehouse, the objective function and determining the optimization model and finally evaluating the impact of the optimization model based on the changes in the variables and constraints in order to facilitate timely decision making. The proposed model can be periodically used by practitioners to analyze the different outcomes based on the changes in the variables.