Title: Decision support system for AS/RS investments: real benefits out of Monte Carlo simulation

Authors: Lauri Lättilä; Juha Saranen; Olli-Pekka Hilmola

Addresses: Lappeenranta University of Technology, Kouvola Unit, Finland, Prikaatintie 9, FIN-45100 Kouvola, Finland ' Lahti University of Applied Sciences, Ståhlberginkatu 4, FIN-15110 Lahti, Finland ' Lappeenranta University of Technology, Kouvola Unit, Finland, Prikaatintie 9, FIN-45100 Kouvola, Finland

Abstract: Warehousing plays an important role in the efficiency of today's international supply chains. Optimal configuration of warehouse activities depends on several design criteria. Basic alterative system designs are based either on manual labour or automated systems. While manual systems typically require smaller investments, automated systems in turn enable increased efficiency in space utilisation, advanced flexibility, as well as reduction in spoilage and administration cost. In this research, we combine static spreadsheet modelling with Monte Carlo simulation to estimate the payback time of two suggested automatic storage and retrieval system (AS/RS) investments as well as for identifying the main factors affecting their economic feasibility. By offering a rapid tool for evaluating the potential of an AS/RS, detailed time consuming analyses need to be performed only for the most potential configurations.

Keywords: investment analysis; automatic storage and retrieval systems; AS/RS investment; warehousing; decision support systems; DSS; Monte Carlo simulation; spreadsheet modelling; payback time.

DOI: 10.1504/IJTIP.2013.058133

International Journal of Technology Intelligence and Planning, 2013 Vol.9 No.2, pp.108 - 125

Published online: 08 Dec 2013 *

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