To decompose, or not to decompose – A short discussion based on a milk-run-picking environment

Milk-run-picking is a warehousing strategy especially suited whenever fast order delivery is of high importance. In consequence, it can be found in warehouses of online retailers often. Existing research on this environment tackles optimizing the picking policy, such that the time need for order picking is minimized. However, due to the picking strategy, a down-stream order consolidation process is needed, where orders picked in one batch are separated and partial orders are consolidated. This process is interdependent to the picking process and highly time critical as well. Based on this example, a closer look at holistic planning in warehouses is provided. The resulting optimization problem is presented, and results are compared to sequential planning approaches.