Optimal decision-making on product allocation for crossdocking and warehousing operations

Many companies search for efficient distribution alternatives, as the lead times for customer order fulfilment need to be shortened while the costs and risks of warehousing need to be minimised. Crossdocking is an operation strategy that moves items through consolidation centres or crossdocks without putting them into storage. A distribution centre normally is a combination of crossdocking and warehousing facilities. The operator of the centre needs to be clear on what products should go through by crossdocking or warehousing. Industry needs guidelines and models to support decision-making and produce alternative plan for allocating products to crossdocking and warehousing operations. This paper presents a systematic approach and optimisation model for producing product allocation plan in FMCG supply chains. A case study based on the proposed model and a prototyping system is introduced. Testing analysis is also given in the paper.