Study On Location Optimization In Distribution Center Of An Electronic Componenet Distributor

With the development of logistics，more and more enterprises pay their attentions tooptimize logistic operations in order to minimize the running costs and improve theirbottom lines. Inventory picking cost is one of the greatest concerns as it takes up to60%of the entire operational cost. The supply chain of electronic products has turned out to bequicker，frequent and diversified with the fast upgrading of new electronic productranges. It reinforces the electronic components distributors’ role of middleman，whoconnects the electronic elements manufacturers and the terminal makers，that fulfils thesupply needs of clients in a more efficient and accurate way. Therefore，it becomes themost popular subject for major components distribution centers to boost their productivityof inventory picking operation and reduces the relevant costs in the same time.The study aims to optimize use of the closest storage locations and lift theeffectiveness of inventory picking，especially reducing the walking distance ofwarehouse staff who picks up high-demand items by using greedy algorithm. The researchis conducted on the basis of the distributors having low productivity in inventory pickingbut high running costs. It also takes consideration of the nature of the electroniccomponents distribution，known as “bulk in and minor out”. Furthermore，the studyintroduces the model of optimization of storage location allocation and it brings up the new terminology of “turnover efficiency ratio” which marries the turnover ratio toinventory days.