Multi-echelon fulfillment warehouse rent and production allocation for online direct selling

Zhanwei Tian and Guoqing Zhang ()
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Zhanwei Tian: Northeast Agricultural University
Guoqing Zhang: University of Windsor

Annals of Operations Research, 2021, vol. 304, issue 1, No 17, 427-451

Abstract: Abstract We consider the joint decision problem of renting three types of warehouses and allocating products among the warehouses in an E-commerce supply network, which are supplier, regional, and local warehouses. The research is motivated by a real-world emerging problem in an open warehouse platform (OWP) environment. We focus on the distinct characteristics of a network using an OWP and its underlying cost drivers and propose a nonlinear mixed integer programming model that reflects the interdependencies among inbound transportation, warehousing, delivery, and return, as well as time-sensitive demand. Our nonlinear model with multiple products is converted into a linear form so that it can be solved by a solver. The application of the model to a real-world case of a leading E-commerce company in China demonstrates a significant potential to increase profit, and our sensitivity analysis provides insights for operations managers into warehouse rent and inventory decisions.

Keywords: E-commerce; Warehouse rent; Supply network; Inventory; Open warehouse platform (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (3)

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DOI: 10.1007/s10479-021-04202-0

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