Quantum optimization for the warehouse layout problem

Abstract

The warehouse layout problem (WLP), also known as warehouse slotting problem, aims to determine the assignment of products to storage locations while minimizing the total travel distance for picking operations. It is combinatorial in nature and well-known to be NP-hard. To obtain high-quality solutions to medium and large WLP instances efficiently remains a computational challenge, which has motivated our work on applying quantum optimization algorithms for this problem. We reformulate the classical quadratic assignment programming (QAP) model of the WLP to a quadratic unconstrained binary optimization (QUBO) model. Our QUBO model avoids adding slack variables and reduces additional overheads as in the typical QUBO reformulation approach, which facilitates the application of the D-Wave Leap Hybrid solver. Computational study is performed on a use case with 30 stock-keeping-units (SKUs) and 32 storage slots, for which the QUBO formulation has 960 binary decision variables. We show that the D-Wave Leap Hybrid solver finds better solution to the base scenario than the exact IBM CPLEX mixed-integer quadratic programming (MIQP) solver operating under a 60-second wall-clock limit, one-tenth of the 600-second budget allocated to CPLEX in this experimental design. A sensitivity analysis across 30 scenarios, generated by crossing five annual pick volume profiles with six co-picking matrix density levels (0.5 to 1.0), shows that the D-Wave hybrid solver outperforms CPLEX MIQP solver in 26 of 30 cases, with solution quality improvements of 0.4 to 12.1%. D-Wave’s advantage generally increases as the density of co-picking matrix decreases. These results demonstrate quantum utility for WLP and motivate further investigation of hybrid quantum-classical methods for combinatorial logistics optimization at industrial strength scales.