Highlights Introducing the “window of decision opportunity” concept in e-tailing environment. Formulating source of fulfillment and inventory transshipment decisions in e-tailing. Proposing an efficient Benders decomposition solution algorithm for the problem. Providing managerial insights extracted from numerical experiments.
Abstract We consider an inventory fulfillment-allocation and transshipment problem in an e-tailing environment. For a typical e-tailer, each customer demand is fulfilled from the closest fulfillment center if there are enough inventories. Otherwise, the e-tailer would transship stock from a nearby facility or transfer the customer order so it is fulfilled from another facility, depending on the economics of transportation. We develop a mixed-integer programming model to help e-tailers optimally fulfill customer orders while minimizing logistics costs. We propose a Benders decomposition-based approach to efficiently find optimal solutions. Our computational results demonstrate the importance of considering inventory transshipments in online deliveries.
Fulfillment source allocation, inventory transshipment, and customer order transfer in e-tailing
2015-04-17
17 pages
Article (Journal)
Electronic Resource
English
Fulfillment source allocation, inventory transshipment, and customer order transfer in e-tailing
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