Author
Bayram, A., Cesaret, Bahriye
Publication Date
2021-11-01
Publication Place
-
Elsevier
Subject
Dynamic programming, Omni-channel retailing, Order fulfillment, Retailing, Ship-from-store
Type
Periodical
Language
English
Digital
Yes
Manuscript
No
Library
Özyeğin University
Library Asset ID
0377-2217
Record ID
ca010310-3912-40b8-961c-5a538416ac26
Library Location
Business Administration
Date
2021-11-01
Sample Text
One of the recent trends in omni-channel retailing is ship-from-store which allows a retailer to fulfill online orders by using inventory from a nearby store. The benefits of this fulfillment model include faster delivery, lower shipment costs, higher in-stock probability, increased sales and customer satisfaction, etc. Despite its many benefits, this fulfillment model introduces many new operational challenges to the retailer, including the need to identify from which location to fulfill an online order when it arrives. In this study, we consider a retailer having both online and store operations, with each channel carrying its own inventory. Store orders are fulfilled from store inventories, whereas an online order can be shipped either from an online fulfillment center or from any other store that maximizes the retailer's overall profit. Our study investigates dynamic fulfillment decisions: from which location to fulfill an online order when it arrives. We incorporate the uncertainty both in demand and in the cost of shipment to individual customers to characterize the optimal cross-channel fulfillment policy. Due to the optimal policy being computationally intractable for large-sized problems, we construct an intuitive heuristic policy to guide the retailers in their fulfillment decisions. We find that the proposed heuristic method is effective and obtains solutions within a reasonable amount of time for the cross-channel fulfillment problem.
DOI
10.1016/j.ejor.2020.01.011
Cilt
294
