RightChain Pallets Optimization Controls
RightChain Pallets Optimization Controls
RightChain Pallets optimization controls, allows the user to specify their unique pallet storage and picking scenario; and simulate alternative design scenarios. The user-defined controls, include the computational method for estimating storage capacity requirements, activity level indexing, wage rates, unit occupancy costs, warehouse storage clear height, warehouse working hours per year, warehouse working days per year, and the planning horizon for the optimization solution.
Computational Method for Estimating Storage Capacity Requirements
RightChain Pallets offers users four different methods to estimate storage capacity requirements - (a) Planned Slot Utilization, (b) Maximum Days On Hand, (c) Current Pallets On Hand, and (d) Forecast Pallets On Hand.
Method 1: Planned Slot Utilization
In the Planned Slot Utilization method, the user specifies the planned slot occupancy percentage, the peak to average inventory ratio, and the percentage of peak inventory to plan for. The planned slot occupancy percentage typically ranges between 60% and 90%. The peak to average inventory ratio is normally in the range of 1.2 to 2.0, The percent of peak inventory to plan for typically ranges from 0.8 to 1.5.
The estimated pallet storage capacity requirement for an SKU using the Planned Slot Utilization method is as follows:
Pallet Storage Capacity =
(Average Inventory x Peak to Average Ratio x Percent Peak to Plan For) / Planned Slot Utilization
Let's suppose an SKU has an average of 100 pallets on hand, and the peak to average inventory ratio is 1.5. The estimated peak inventory would be 100 pallets on hand x 1.5 = 150 pallets.
Let's also suppose that we want to plan to accommodate 10% more than the peak, or 1.1 times the peak; and that we can plan to occupy 70% of the positions devoted to that SKU.
In that case the estimated storage capacity requirement would be...
(100 pallets x 1.5 x 1.1)/0.9 = 183 pallet positions
Method 2: Maximum Days On Hand
In the Maximum Days On Hand method, RightChain Pallets provides storage capacity to accommodate a maximum number of pallets per SKU. The maximum number of pallets on hand is computed as the product of the average pallets shipped per day and the maximum days on hand specified by the user.
Storage Capacity Requirements = Average Pallets Shipped per Day x Maximum Days On Hand
Let's suppose there is an SKU with a 20 average pallets shipped per day, and the user specifies that the maximum days on hand is 5. In that case the estimated storage capacity requirement would be....
20 pallets per day x 5 days = 100 pallets
Method 3: Current Pallets On Hand
In the Current Pallets On Hand method, RightChain Pallets provides storage capacity to accommodate the current pallets on hand provided in the data input file.
Method 4: Scale Pallets On Hand
In the Scale Pallets On Hand method, RightChain Pallets provides storage capacity to accommodate for each SKU the product of its Current Pallets On Hand and the Scale Ratio. The Scale Ratio is the ratio of the user-specified Design Pallets On Hand to the TOTAL current pallets on hand for all SKUs.
For example, if the sum of the Current Pallets On Hand is 1,000 and the Design Pallets On Hand is 2,000, the Scale Ratio would be 2,000 / 1,000 = 2.0, That ratio would be applied to the Current Pallets On Hand for each SKU in computing the optimal pallet storage and picking solution.