Abstract: An integer linear programming model was formulated to address the optimization problem of relocation in an automated storage/retrieval system. A twostage heuristic method was developed to generate an initial solution. A tabu search algorithm was proposed to improve the solution. Experimental tests were conducted to evaluate the performance of the proposed optimization algorithm based on various data settings. The experimental results show the effectiveness and the robustness of the algorithm. The efficiency of the handling machine and the utilization of the warehouse are improved by applying the algorithm.