An integrated model for warehouse and inventory planning

We propose a tactical model which integrates the replenishment decision in inventorymanagement, the allocation of products to warehousing systems and the assignment of products tostorage locations in warehousing management. The purpose of this article is to analyse the valueof integrating warehouse and inventory decisions. This is achieved by proposing two methods forsolving this tactical integrated model which differ in the level of integration of the inventory andwarehousing decisions. A computational analysis is performed on a real world database andusing multiple scenarios differing by the warehouse capacity limits. Our observation is that thetotal cost of the inventory and warehousing systems can be reduced drastically by taking intoaccount the warehouse capacity restrictions in the inventory planning decisions, in an aggregateway. Moreover additional inventory and warehouse savings can be achieved by using moresophisticated integration methods for inventory and warehousing decisions....