The Benefits of Re-Evaluating Real-Time Fulfillment Decisions
Name
IMST004.pdf
Size
105.68 KB
Format
Adobe PDF
Checksum (MD5)
39a31b65f70be91089e67cf7a37c1824
Author(s)
Xu, Ping Josephine
Allgor, Russell
Graves, Stephen C.
Date Issued
January 2005
Series/Report no.
Innovation in Manufacturing Systems and Technology (IMST);
Abstract
At the time of a customer order, the e-tailer assigns the order to one or more of its order fulfillment centers, and/or to drop shippers, so as to minimize procurement and transportation costs, based on the available current information. However this assignment is necessarily myopic as it cannot account for all future events, such as subsequent customer orders or inventory replenishments. We examine the potential benefits from periodically re-evaluating these real-time order-assignment decisions. We construct near-optimal heuristics for the re-assignment for a large set of customer orders with the objective to minimize the total number of shipments. We investigate how best to implement these heuristics for a rolling horizon, and discuss the effect of demand correlation, customer order size, and the number of customer orders on the nature of the heuristics. Finally, we present potential saving opportunities by testing the heuristics on sets of order data from a major e-tailer.
Subjects
Fulfillment
Assignment
Network Design
Persistent DSpace Link
