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August 2010

Developing Spreadsheet Based Decision Support

System to Solve Warehouse Layout Problem

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World Engineering Congress 2010, 2nd 5th August 2010, Kuching, Sarawak, Malaysia
Conference on Manufacturing & Technology Management

CMTM59
DEVELOPING SPREADSHEET BASED DECISION SUPPORT
SYSTEM TO SOLVE WAREHOUSE LAYOUT PROBLEM
Taravatsadat nehzati1, Napsiah Ismail2, Hannaneh Rashidi Bajgan3, Faieza Abdul Aziz4
1
Universiti Putra Malaysia, Faculty of Engineering, Department of Mechanical and
Manufacturing Engineering, 43300, UPM, Serdang, Malaysia
Email: taravat.s.nehzati@gmail.com
2
Universiti Putra Malaysia, Faculty of Engineering, Department of Mechanical and
Manufacturing Engineering, 43300, UPM, Serdang, Malaysia
Email: napsiah@eng.upm.edu.my
3
Mazandaran University of Science and Technology, Department of Industrial Engineering,
Babol, Iran
Email: hannaneh.rashidi@gmail.com
4
Universiti Putra Malaysia, Faculty of Engineering, Department of Mechanical and
Manufacturing Engineering, 43300, UPM, Serdang, Malaysia
Email: dr.faieza.upm@gmail.com

ABSTRACT
A plant layout study is to analyze different physical configurations for an industrial plant. The
warehouse layout problem involves allocating several different product types to certain areas of
warehouse so that the cost of material handling from docks of the warehouse can be minimized. The
layout of a warehouse may need to be change to accommodate new product lines or to add greater
flexibility to the warehouse operations. To ensure the success of the project, a detailed planning process
should be followed. Regarding to above Decision Support Systems (DSS) are developed to help
companys personnel, modify the configuration of warehouse layout. In this paper, discrete integer
programming for modeling the layout problem has been linked to Visual Basic programming in Excel to
develop an spreadsheet based decision support system (DSS) in which , the user specifies the area of the
warehouse in number of bays, places the docks around the warehouse and gives the frequency of their
usage, and provides the demand and area required per product type. Then the problem will be solved to
find the proper location of each product type for minimum material handling cost.
Keywords: Warehouse, Spreadsheet, Decision Support System, Integer programming.

1. INTRODUCTION
Warehouses usually have docks for loading/ unloading products, areas for storing and the trucks that
deliver/pick up goods which may arrive at one of the loading/unloading docks. Warehousing is considered as
three main activities: i) receiving products, ii) storing products until they are demanded by a customer and iii)
retrieving the products. In warehouse managing, the operating staff should decide where to store the goods [3].
To find the best location for allocating goods and products in warehouse area, minimizing transportation from
loading and unloading bay to docks will be important in order to minimize either the cost of accessing products
and transporting them to the to the dock or loading them from the dock and conveying them to the storage area.
As a result, goods and products compete for storage areas that are closest to the docks. However minimizing the
goods and products travelling distance is not the only objective which should be put under consideration. A
successful warehouse layout must achieve the following objectives, in spite of material being stored: maximize
the use of space, maximize the use of equipment, maximize the use of labour, maximize accessibility to items,
and maximize goods protection.
Considering many difficulties in warehouse layout planning, like uncertainties and fluctuation in production
demand it will be crucial for warehouse management, to be provide with flexible decision making system to
support varying warehouse inventory. Necessity of decision support system in plant layout problems
demonstrated by different researchers [1, 2 and5] . The decision maker had to choose a proper model for a given
situation and formulating the final layout plans. The selection of an appropriate procedure is often difficult due

World Engineering Congress 2010, 2nd 5th August 2010, Kuching, Sarawak, Malaysia
Conference on Manufacturing & Technology Management

to the fact that the solution procedures currently in use do not include many of the planning aspects of the layout
problem [1].
In the absence of a defined and accepted methodology, most warehouse designers have developed their own
approach [6]. Queirolo et.al [8] considered distance reduction and travel time minimization to optimize
warehouse layout. They used heuristic genetic algorithm and deterministic simulation model. To show
effectiveness of the developed algorithm proposed tool applied in a real case of an Italian soft drink company.
In research with warehouse designers undertaken by Govindaraj et.al [4] the very complex trade-offs made by the
designers are described. It concluded that a more formalized process would be of great assistance to
practitioners. Yang and Feng [10] demonstrated a new model and algorithm to deal with multi level warehouse
problem under fuzzy environment. In order to minimize the total transportation cost, a chance-constrained
programming model is designed for the problem based on the credibility measure and then TS algorithm based
on the fuzzy simulation is designed to solve the model.
The aim of this paper is to build a decision support system that will allow warehouse managers to decide about
allocating the storage space available to goods in such a way that the material handling costs are minimized.
Mathematical model for this problem is developed in section 2. Section 3 provides decision support system in
Microsoft Excel. The result of developing decision support system for warehouse layout based on Francis
(1992) model [3] will be discuss in section 4.

2. FRANCIS MODEL FOR WAREHOUSE LAYOUT

The integer programming formulation of this problem wishes to:
p

min : ij x ij
i =1 j =1

subject to :
q

ij

= ai

for i = 1,..., p

(1)

=1

for j = 1,..., q

(2)

for i = 1,..., p; j = 1,..., q

(3)

j =1
p

ij

i =1

xij {0,1}

In this model p storing items and r loading/unloading docks has been assumed. Classically, warehouses store
items on pallets, and ik is relative to the number of loaded pallets of item i moving between dock k and the
storage area of i. To model and solve warehouse layout, this problem is discretized by subdividing the floor area
into q square grids of equal size, numbered in any convenient manner from 1 to q. We consider ai as the total
p

number of necessary grids to store item i. Assume that ai = q . Let ckj represent the distance between dock k
i =1

and the center of grid j. xij are decision variables that decide about storing item i in grid square j.
r
Notably ij = 1 ik ckj is the average cost for locating item i in grid j, assuming that each item is equally
Fi k =1
likely to be loaded or unloaded from each dock. As it displayed, minimizing the average costs of material
handling is the objective of Francis model [3]. The first set of constraints shows that the space occupied by an
item should be equal to the space required for storing the item. The second set of constraints shows one item is
allowed to be store in certain storage area. The last set of constraints is the binary constraints.

As it demonstrated in objective function, this problem is an instance of the transportation problem. This paper
aim to use Excel to solve the problem; however, many heuristic procedure might be develop to solve this
p

problem. The problem assumes that ai = q ; therefore, we know that all the space available will be use. Sort
i =1

the coefficients

ij s in ascending

order. Start with the minimum

ij

and assign item i in grid j. Continue

World Engineering Congress 2010, 2nd 5th August 2010, Kuching, Sarawak, Malaysia
Conference on Manufacturing & Technology Management

assigning the items to grids. Note that if grid j* is already assigned to an item, grid j* will not be available for
the next assignments. Also, after each assignment of item i* the amount of that item available for the next
assignments is reduced.

3. SPREADSHEET BASED DECISION SUPPORT SYSTEM

Decision support systems that are built using spreadsheet software can be called spreadsheet-based DSS [7].
Spreadsheets can be used to build different types of Decision Support Systems (DSS). Spreadsheet are
appropriate for building a DSS with small models, for building a DSS prototype or for testing the DSS models,
etc [9]. The user interface can be build using buttons, lists and the operations can be automated using Macros or
Visual Basic.
Here Francis model for warehouse layout design adapted to graphical user interface using Visual Basic in
Microsoft Excel. In this program, which developed to ease decision making for warehouse managers and staff,
to cope with variation in inventory level; the user specifies the area of the warehouse in number of bays (Figure
1), places the docks around the warehouse and gives the frequency of their usage (Figure 2), and provides the
demand and area required per product type (Figure 3). Then the problem will be solved to find the best locations
(Figure 4) of each product type for minimum material handling cost.

Figure 1: Initial Data main window

3.1 Warehouse layout: bays and docks

The entire area of the warehouse is shown here; each numbered unit is a bay. User will need to place each of
docks around the perimeter of the warehouse area.
Docks
information

Warehouse
area

Figure 2: Docks and bays information window

To place docks, user may click on a cell adjacent to one of the bays. Then complete the dock table by specifying
which bay the dock is adjacent to and the frequency with which this dock is used (these frequencies should sum
to 100%).

World Engineering Congress 2010, 2nd 5th August 2010, Kuching, Sarawak, Malaysia
Conference on Manufacturing & Technology Management

3.2 Product information

For each product type, the required area (number of bays), and the daily demand should be entered. This daily
demand signifies the priority of this product type; it is a key value in determining the location of product types
to reduce material handling cost.

Figure 3: Product information window

3.3 Final warehouse layout

This is the final warehouse layout. Each product type which represented by a different color (P1, P2, and P3) is
assigned to an area of bays. Note that product types with highest demand are closest to docks of highest
frequency.

Figure 4: Final layout design window

Proposed system is applicable in unstable situation in aid of system efficiency. Whenever one of
warehouse/products characteristics changed (demand variation for products, ducks frequency of usage or even
number of products user can Resolve the problem. If it is needed, user can force some product type assignments
before resolving, it is possible for user to click on a product type from the legend and then click the bay in the
Resolve Layout grid.

4. CONCLUSION
The main purpose of DSS is to support managers in decision making process, to improve the quality of their
decisions and to reduce the necessary time to make a decision. DSS improve managers activities and the way
the problems are solved, especially in unstable situations such as fluctuations in demand which leads to
uncertainties in warehouse layout decision making process.
Spreadsheet programs are the most popular modelling tools because its incorporate financial, statistical,
mathematical and other functions. The spreadsheet programs have evolved into an important tool for analysis,
planning and modelling. Choosing Excel as a DSS generator has a number of advantages: is accessible, is
known by a great number of business users, is easy to use, can perform a lot of analysis optimization,
simulation, and sensitivity analysis. In this paper a decision support system developed based on Francis model
in warehouse layout to ease warehouse managers decision making.

World Engineering Congress 2010, 2nd 5th August 2010, Kuching, Sarawak, Malaysia
Conference on Manufacturing & Technology Management

REFERENCES
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planning. Decision Support Systems, 40(2), 305-314.
[3] Francis, R. L., McGinnes, L. F., & White, J. (1992). In Kaster E. (Ed.), Facility layout and location: An
analytical approach (2nd ed.). New yourk: Prentice-Hall.
[4] Govindaraj T, Blanco E, Bodner D, Goetschalckx L, McGinnis L, Sharp P (2000). Design of warehousing and
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International Conference on Systems, Man and Cybernetics, 811 October, Nashville, Tennessee, USA, pp. 10991104.

[5] Liggett, R. S. (2000). Automated facilities layout: Past, present and future. Automation in Construction, 9(2),
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[6] Oxley J (1994). Avoiding inferior design. Storage Handling and Distribution 38 (2), 2830.

[7] Power, D. J. (2004), "A Brief History of Spreadsheets", DSSResources.COM,

http://dssresources.com/history/sshistory.html, version 3.6, 08/30/2004.
[8] Queirolo F, Schenone M, Nan P (2002). Warehouse layout design: Minimizing travel time with a genetic and simulative
approach methodology and case study. 14th EUROPEAN SIMULATION SYMPOSIUM (ESS2002), Germany.

[9] Rozalia, R. V., & Valentin, T. (2008). Spreadsheet based decision support system. Proceeding of European
Integration - New Challenges for the Romanian Economy Conference, Romania. , 4 1509-1514.
[10] Yang L, Feng Y (2006). Fuzzy multi-level warehouse layout problem: New model and algorithm. Journal of Systems
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