Analyzing Inventory Placement of Low-Volume Items in Online Retail
Name
li-jzli-meng-eecs-2025-thesis.pdf
Description
Thesis PDF
Size
438.52 KB
Format
Adobe PDF
Checksum (MD5)
20dddd8c7ff952ca313b0fac4db74068
Author(s)
Li, Joseph
Advisor(s)
Graves, Stephen
Date Issued
May 2025
Publisher
Massachusetts Institute of Technology
Abstract
Managing inventory effectively is a consistently difficult challenge for many large online retailers. This problem is exacerbated when dealing with low-volume items, which often occupy a disproportionately large proportion of inventory space and resources. This research lays out a foundation for investigating how to optimally place inventory across fulfillment centers (FCs) and higher-echelon storage facilities (HEFs).
A simulation has been built that considers demand rates, relevant costs (handling, shipping, holding, etc.), and other relevant metrics (review period, lead time, safety factor, etc.). The model closely mimics how a particular large online retailer functions. It can generate reports showing how costs and fill rates change with tweaks to specific inputs or methods of choosing how to allocate inventory. Building on this simulation, our analysis suggests that this research could lead to significant cost savings and better customer service.
MIT Department
Massachusetts Institute of Technology. Department of Electrical Engineering and Computer Science
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In Copyright - Educational Use Permitted
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