Show simple item record

dc.contributor.authorAcimovic, Jason
dc.contributor.authorGraves, Stephen C.
dc.date.accessioned2015-10-26T15:49:05Z
dc.date.available2015-10-26T15:49:05Z
dc.date.issued2015-02
dc.date.submitted2013-06
dc.identifier.issn1523-4614
dc.identifier.issn1526-5498
dc.identifier.urihttp://hdl.handle.net/1721.1/99448
dc.description.abstractRelative to brick-and-mortar retailers, online retailers have the potential to offer more options to their customers, with respect to both inventory as well as delivery times. To do this entails the management of a distribution network with more decision options than a traditional retailer. The online retailer, not the customer, decides from where items will ship, by what shipping method, and how or whether multiple-item orders will be broken up into multiple shipments. What is the best way to fulfill each customer’s order to minimize average outbound shipping cost? We partner with an online retailer to examine this question. We develop a heuristic that makes fulfillment decisions by minimizing the immediate outbound shipping cost plus an estimate of future expected outbound shipping costs. These estimates are derived from the dual values of a transportation linear program (LP). In our experiments on industry data, we capture 36% of the opportunity gap assuming clairvoyance, leading to reductions in outbound shipping costs on the order of 1%. These cost savings are achieved without any deterioration in customer service levels or any increase in holding costs. The transportation LP also serves as the basis for a metric that provides information on the quality of the inventory position. Based on initial successful piloting, our industrial partner has implemented the metric as well as a version of the heuristic that it is applying to every fulfillment decision for each of its stock keeping units in North America.en_US
dc.description.sponsorshipSingapore-MIT Alliance for Research and Technologyen_US
dc.language.isoen_US
dc.publisherInstitute for Operations Research and the Management Sciences (INFORMS)en_US
dc.relation.isversionofhttp://dx.doi.org/10.1287/msom.2014.0505en_US
dc.rightsCreative Commons Attribution-Noncommercial-Share Alikeen_US
dc.rights.urihttp://creativecommons.org/licenses/by-nc-sa/4.0/en_US
dc.sourceProf. Graves via Shikha Sharmaen_US
dc.titleMaking Better Fulfillment Decisions on the Fly in an Online Retail Environmenten_US
dc.typeArticleen_US
dc.identifier.citationAcimovic, Jason, and Stephen C. Graves. “Making Better Fulfillment Decisions on the Fly in an Online Retail Environment.” M&SOM 17, no. 1 (February 2015): 34–51.en_US
dc.contributor.departmentSloan School of Managementen_US
dc.contributor.approverGraves, Stephen Cen_US
dc.contributor.mitauthorGraves, Stephen C.en_US
dc.relation.journalManufacturing & Service Operations Managementen_US
dc.eprint.versionAuthor's final manuscripten_US
dc.type.urihttp://purl.org/eprint/type/JournalArticleen_US
eprint.statushttp://purl.org/eprint/status/PeerRevieweden_US
dspace.orderedauthorsAcimovic, Jason; Graves, Stephen C.en_US
dc.identifier.orcidhttps://orcid.org/0000-0001-5966-6032
mit.licenseOPEN_ACCESS_POLICYen_US


Files in this item

Thumbnail

This item appears in the following Collection(s)

Show simple item record