Layout design for a paper reel warehouse: A two-stage heuristic approach

We consider a paper reel layout problem where different classes of paper reels need to be placed in the cells of a warehouse. Each paper reel class contains different types of reels and each type has its own demand and inventory requirement. The problem is how to layout the paper reel types into the cell space so the total transportation cost is minimized. In this paper, we model the problem and point out its NP-hardness. A natural decomposition of the problem enables a simple optimal solution method and a simulated annealing method to be used iteratively to solve the problem. Our computational results seem to indicate that the proposed solution method is extremely effective in finding high quality solutions, and efficient in solving such large size problems.