Positioning of goods in a cross-docking environment

Cross docking is one of the options to reduce lead times and inventories and to improve customer response time in supply chains. Cross-docking centres are dynamic environments where products arrive, are regrouped, and leave the same day. In this paper we focus on the process of short-term storage of unit-loads in a cross-docking environment. The goal is to determine temporary storage locations for incoming unit loads such that the travel distances of the forklift trucks with these unit loads are minimised. We model this problem as a novel application of the minimum cost flow problem and show the applicability of the model for different types of layouts and priorities. We demonstrate both the efficiency and effectiveness of the method in the operational and design phase at cross docking environments by applying it to practice-oriented examples. Furthermore, we show that the approach is superior to a commonly used heuristic method.