Warehouse sizing and inventory scheduling for multiple stock-keeping products

In this paper, a commercial problem of enterprise logistics nature called multi-product warehouse sizing problem is formulated and solved. The optimal warehouse inventory level and the order points are determined by minimizing the total inventory ordering and holding costs for a specific time period. The problem is formulated as an appropriate mathematical model of nonlinear programming and solved using appropriate numerical optimization techniques (successive quadratic programming procedures). The entire mathematical background for formulating the problem and finding the optimal solutions to it is presented and appropriately addressed. The model is also illustrated with the help of a numerical case study where the sensitivity of the model parameters involved is given through appropriate figures.