 Optimizing Omni-Channel Fulfillment with Store TransfersJoydeep Paul, Niels Agatz and Martin Savelsbergh Transportation Research Part B: Methodological, 2019, vol. 129, issue C, 381-396 Abstract: The presence of different distribution channels in omni-channel retail makes the fulfillment process challenging. When consumers can buy online and pick up their purchased goods at a store, the stores are often visited by a vehicle that supplies the pick-up points (PUPs) and by a vehicle that replenishes the store’s inventory. We study the benefit of exploiting any spare capacity in the vehicles replenishing store inventories to reduce online order fulfillment cost by transferring online orders to these vehicles at one or more of the stores visited. This involves choosing transfer locations and the set of stores whose online orders are transferred at these locations so as to minimize the online order fulfillment cost. We present a mixed integer linear programming model as well as an effective and efficient heuristic for solving this problem. An extensive computational study shows that significant benefits can be achieved by sharing capacity across the two channels. Keywords: Transportation; Routing; Capacity sharing; Store transfers; Omni-channel retail; Heuristics (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:transb:v:129:y:2019:i:c:p:381-396 Ordering information: This journal article can be ordered from DOI: 10.1016/j.trb.2019.10.002 Access Statistics for this article Transportation Research Part B: Methodological is currently edited by Fred Mannering More articles in Transportation Research Part B: Methodological from Elsevier |
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