A Storage Location Assignment Problem with Incompatibility and Isolation Constraints: An Iterated Local Search Approach

Centralised warehouses are a widespread practice in the healthcare supply chain, as they allow for the storage of large quantities of products a short distance from hospitals and pharmacies, allowing both a reduction in warehouse costs and prompt replenishment in case of shortages. However, for this practice to lead to effective optimization, warehouses need to be equipped with efficient order fulfillment and picking strategies, as well as a storage policy that takes into account the specific procedures of the various types of items, necessary to preserve their quality. In this framework, we present a storage location assignment problem with product-cell incompatibility and isolation constraints, modeling goals and restrictions of a storage policy in a pharmaceutical warehouse. In this problem, the total distance that order pickers travel to retrieve all required items in a set of orders must be minimised. An Iterated Local Search algorithm is proposed to solve the problem, numerical experiments based on simulated data are presented, and a detailed procedure is provided on how to retrieve and structure the warehouse layout input data. The results show a dramatic improvement over a greedy full turnover procedure commonly adopted in real-life operations.