Cost and Throughput Modeling of Manual and Automated Order Fulfillment Systems

The e-commerce revolution has raised awareness about the need for more efficient order fulfillment systems. Our research provides a design aid for companies engaged in order fulfillment system design, emphasizing the decision of whether or not to automate the sorting process. We have developed a descriptive model for this problem based on demand levels, labor rates, order sizes, and other factors. This model is incorporated into a simple cost-based optimization model to recommend a solution. To demonstrate the performance of the recommended system with stochastic factors, we have simulated the output of our model for several test problems. In the event that the model recommends a manual sorting system, we have provided an analytical model to aid in the design and operation of such systems by determining the optimal batching level.

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