On the Suboptimality of Full Turnover-Based Storage

In the past thirty years the full turnover-based storage policy as described by Hausman et al. (1976, Management Science 22(6)) has been widely claimed to outperform the commonly used ABC class-based storage policy, in terms of the resulting average storage and retrieval machine travel time. In practice however, ABC storage is the dominant policy. Hausman et al. (1976) model the turnover-based policy under the unrealistic assumption of shared storage, i.e. the storage space allocated to one product can only accommodate its average inventory level; no specific space is reserved to store the maximum inventory of a product. It appears that many authors citing Hausman et al.'s results overlook this assumption and use the resulting storage and retrieval machine travel times as if it were valid for full turnover-based storage. Full turnover-based storage is a dedicated storage policy where the storage space allocated to one product must accommodate its maximum inventory level. This paper adapts the travel time model of Hausman et al. to accommodate full turnover-based dedicated storage. Surprisingly, the result of the adapted travel time model is opposite to that of Hausman et al. (1976) but, in line with practice, it supports that ABC (2- or 3-) class-based storage normally outperforms full turnover-based storage