Carton-Mix Optimization for Walmart.com Distribution Centers

Sanjay L. Ahire (), Manoj K. Malhotra () and John B. Jensen ()
Additional contact information
Sanjay L. Ahire: Department of Management Science, Moore School of Business, University of South Carolina, Columbia, South Carolina 29208
Manoj K. Malhotra: Department of Management Science, Moore School of Business, University of South Carolina, Columbia, South Carolina 29208
John B. Jensen: Department of Management Science, Moore School of Business, University of South Carolina, Columbia, South Carolina 29208

Interfaces, 2015, vol. 45, issue 4, 341-357

Abstract: Walmart’s Internet shopping business has grown considerably since 2006. To effectively and efficiently serve this business model, Walmart launched distribution centers (DCs) in the United States; these DCs focus on fulfilling orders placed online at the Walmart.com website. The Carrollton, Georgia distribution center (CDC) handles a significant portion of the volume of products shipped directly to customers and stores for customer pickup. In spring 2011, the CDC executed a focused cost-improvement project to optimize its carton mix, defined as the sizes of the shipping cartons that can be erected using automation or built manually. The goals of this project were to develop a process to create an optimal mix of carton sizes to reduce shipping, material, and labor costs of conveyable orders, and improve customer satisfaction. Working in close coordination with CDC managers and Walmart’s corporate supply chain team, we developed an Excel-based solution algorithm to determine the optimal carton sizes for four automated and six manual carton sizes. Walmart has fully implemented this solution algorithm into a decision support system for reconfiguring the carton mix at the CDC. The company has certified order-fulfillment cost savings of $600,000 per year and has projected annual cost savings of $2 million across the entire Walmart.com network.

Keywords: distribution center logistics; business-to-consumer orders; online shopping; packaging (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://dx.doi.org/10.1287/inte.2015.0797 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:inm:orinte:v:45:y:2015:i:4:p:341-357

Access Statistics for this article

More articles in Interfaces from INFORMS Contact information at EDIRC.
Bibliographic data for series maintained by Chris Asher ().