Lowering Outbound Shipping Costs In An Online Retail Environment By Making Better Fulfillment And Replenishment Decisions

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Lowering Outbound Shipping Costs in an Online Retail Environment by Making Better Fulfillment and Replenishment Decisions

Author : Jason Andrew Acimovic
Publisher :
ISBN 13 :
Total Pages : 198 pages
Book Rating : 4.:/5 (828 download)

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Book Synopsis Lowering Outbound Shipping Costs in an Online Retail Environment by Making Better Fulfillment and Replenishment Decisions by : Jason Andrew Acimovic

Download or read book Lowering Outbound Shipping Costs in an Online Retail Environment by Making Better Fulfillment and Replenishment Decisions written by Jason Andrew Acimovic and published by . This book was released on 2012 with total page 198 pages. Available in PDF, EPUB and Kindle. Book excerpt: As online retailing - or e-tailing - continues to grow as more and more customers buy physical goods on the internet, finding ways to reduce the cost and environmental impact of outbound shipping in this sector will become increasingly important. We investigate the impact of making poor fulfillment and replenishment decisions using data obtained from a large American online retailer. Then, we propose implementable - i.e., computationally tractable and relatively intuitive - solutions for both the fulfillment and replenishment problems, both tested either on actual data from our industrial partner or on small but realistic models. We first focus on the fulfillment problem, namely, deciding from which warehouse(s) to fulfill a customer's order when several options exist. We propose a heuristic that utilizes the dual values of a transportation linear program to estimate the opportunity cost of depleting inventory from a warehouse. This linear program values inventory at a warehouse due to both its geography and the size of its catalogue. After showing that this linear program is asymptotically optimal - using concepts developed in airline network revenue management - we then test the heuristic on industry data, showing a 1% reduction in outbound shipping costs as compared to a myopic fulfillment policy. The last part of the thesis focuses on replenishment. Every period, for each item, the network places an order to restock all the warehouses. Complicating this decision are two factors. First, the orders will not arrive immediately, but rather require a lead time to be delivered. During this time a random number of customers will place orders with the network. Second, any customer's order may be filled from any warehouse, which becomes important when warehouses stock out of an item. Therefore, it is not trivial to calculate the optimal inventory to order to each warehouse. We show that using a standard replenishment policy - popular in practice - can lead to dynamics that result in increased outbound shipping costs. We propose a replenishment policy heuristic that is intuitive and performs well on examples. This heuristic has two variants: a simpler one that assumes deterministic demand, and a more complicated one that accounts for stochasticity.

Making Better Fulfillment Decisions on the Fly in an Online Retail Environment

Author : Jason Acimovic
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (137 download)

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Book Synopsis Making Better Fulfillment Decisions on the Fly in an Online Retail Environment by : Jason Acimovic

Download or read book Making Better Fulfillment Decisions on the Fly in an Online Retail Environment written by Jason Acimovic and published by . This book was released on 2022 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Relative 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 SKUs in North America.

Mitigating Spillover in Online Retailing Via Replenishment

Author : Jason Acimovic
Publisher :
ISBN 13 :
Total Pages : 44 pages
Book Rating : 4.:/5 (13 download)

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Book Synopsis Mitigating Spillover in Online Retailing Via Replenishment by : Jason Acimovic

Download or read book Mitigating Spillover in Online Retailing Via Replenishment written by Jason Acimovic and published by . This book was released on 2017 with total page 44 pages. Available in PDF, EPUB and Kindle. Book excerpt: Online purchases constitute about one tenth of US retail sales. The supply chains that support online retailing are fundamentally different from those that support traditional brick-and-mortar stores. Traditional solutions are not always appropriate to solve online retailing's operations problems; thus, there is an opportunity to understand and improve these novel supply chains. One key characteristic of the inventory systems for online retailing is demand spillover, whereby a stockout at a fulfillment center (FC) results in demand spilling over to another FC. For this context we examine how to allocate inventory to the FCs under a periodic-review joint-replenishment policy, with an objective to minimize outbound shipping costs for a fixed amount of inventory. We first show how traditional decentralized allocation policies may perform suboptimally and induce dynamics (whiplash) that result in costly spillover. We find that this phenomenon increases with the prevalence of local stockouts and with the level of inventory imbalance. We then describe why inventory imbalance occurs in online retailing due to operational realities and provide evidence based on real data. Finally, we propose a heuristic to allocate inventory accounting for possible spillover during the lead time. We test the heuristic by a simulation and show that it performs better than the status quo policy, is robust to operational realities, and captures over 90% of the possible improvement as compared to a pseudo-optimal policy.

Challenges for the order fulfillment process of online retailers due to the COVID-19 pandemic

Author : Paul Heck
Publisher : GRIN Verlag
ISBN 13 : 3346233308
Total Pages : 9 pages
Book Rating : 4.3/5 (462 download)

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Book Synopsis Challenges for the order fulfillment process of online retailers due to the COVID-19 pandemic by : Paul Heck

Download or read book Challenges for the order fulfillment process of online retailers due to the COVID-19 pandemic written by Paul Heck and published by GRIN Verlag. This book was released on 2020-08-26 with total page 9 pages. Available in PDF, EPUB and Kindle. Book excerpt: Essay from the year 2020 in the subject Business economics - Supply, Production, Logistics, grade: 2,0, Cologne Business School Köln, language: English, abstract: This paper aims to identify the challenges for the fulfillment process of online retailers due to the COVID 19 pandemic. No other topic dominates the current public perception more than COVID-19. National, federal and local authorities require their citizens to stay at home and avoid social contact during the pandemic. The result is an e-commerce boom, with online retail orders increasing for example in the US by 146% in comparison to the previous year. However, customers experience that many well-known benefits, such as a seemingly endless selection of affordable products or shipping in two days, are no longer guaranteed. The reason lies in the process of order fulfillment. This process encompasses all the activities a company undertakes from the moment an order is received until the items are delivered, including all customer services. It comprises back-office activities such as packaging, delivery, accounting, inventory management, and shipping as well as front-office activities such as advertising and order acceptance.

Order Fulfillment Algorithms for Online Retail

Author : Pin-Yi Chen
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (139 download)

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Book Synopsis Order Fulfillment Algorithms for Online Retail by : Pin-Yi Chen

Download or read book Order Fulfillment Algorithms for Online Retail written by Pin-Yi Chen and published by . This book was released on 2023 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: We study an order fulfillment problem in an online-retail setting where the retailer's fulfillment system includes warehouses that hold inventory (fulfillment centers), and a transportation network composed of node facilities and transportation arcs. To minimize the total transportation costs for order fulfillment, the online retailer should plan its transportation capacities properly in advance and execute according to the transportation plan by making smart fulfillment decisions. To fulfill a customer order, the online retailer must decide from where to source the inventory needed for the order, as well as how to route the order to the customer to satisfy a delivery time commitment. In this research we focus on the latter decision, namely choosing the route for each order. The online retailer has full control of its transportation system in both planning and execution; in addition, the online retailer can rely on third party carriers to transport some of its orders. We design an order fulfillment algorithm that makes immediate routing decisions for incoming orders. To determine the route to assign to an order, we compare the costs of all feasible routes. For routes that use retailer-controlled resources, we need to account for the opportunity costs associated with these resources. We propose to do this with the dual values from a transportation quadratic program, which tries to account for the uncertainty of the network flows to estimate the opportunity costs of depleting resources in the transportation network. The dual values are updated periodically with the most updated system states that include resource capacities and demand forecasts. We numerically test our algorithm on a realistic network with inputs inspired by the actual data from our industry collaborator. We compare our algorithm with several benchmark algorithms, including a LP-based algorithm that mimics the algorithm in the retailer's current operating system. The experiments show a 50% reduction in the mean percentage difference in shipping cost from the hindsight solution as compared to the LP-based algorithm. In addition to the fulfillment algorithm, we formulate a capacity planning problem that determines the optimal level of transportation resources in the network for a given demand forecast. When the demand deviates from the planned capacity by a lot, adding or removing planned resources becomes a crucial cost-saving mechanism. Motivated by this, we propose ad hoc truck controllers that make online capacity modification decisions and test it with small examples.

Supply Chain Management

Author : Ray R. Venkataraman
Publisher : SAGE Publications
ISBN 13 : 1544375603
Total Pages : 941 pages
Book Rating : 4.5/5 (443 download)

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Book Synopsis Supply Chain Management by : Ray R. Venkataraman

Download or read book Supply Chain Management written by Ray R. Venkataraman and published by SAGE Publications. This book was released on 2022-01-12 with total page 941 pages. Available in PDF, EPUB and Kindle. Book excerpt: Supply Chain Management: Securing a Superior Global Edge takes a holistic, integrated approach to managing supply chains by addressing the critically important areas of globalization, sustainability, and ethics in every chapter. Authors Ray Venkataraman and Ozgun C. Demirag use a wide variety of real-world cases and examples from the manufacturing and service sectors to illustrate innovative supply chain strategies and technologies. With a focus on decision-making and problem-solving, Supply Chain Management provides students with the tools they need to succeed in today’s fiercely competitive, interconnected global economy.

Optimal Fulfillment Strategies in an Omnichannel Retail Supply Chain

Author :
Publisher :
ISBN 13 :
Total Pages : 64 pages
Book Rating : 4.:/5 (126 download)

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Book Synopsis Optimal Fulfillment Strategies in an Omnichannel Retail Supply Chain by :

Download or read book Optimal Fulfillment Strategies in an Omnichannel Retail Supply Chain written by and published by . This book was released on 2020 with total page 64 pages. Available in PDF, EPUB and Kindle. Book excerpt: With the development of digital technologies, more and more brick-and-mortar stores are starting to offer the online channel to sell their products. For example, Walmart and Whole Foods are selling fresh groceries from both their websites and store locations. As a result, such omni-channel retailers need to serve both online and in-store demand. To do that, the retailer may choose to fulfill online demand from a centralized distribution center (DC), or by utilizing inventory of stores. In this thesis, I explore the optimal fulfillment strategies of an omni-channel retailer. Firstly, consider customers' behavior when they face online and in-store purchase options. Using utility theory, model customers' behavior in preferring either channel. Secondly, I explore the impacts of retailers' fulfillment choices on its inventory cost, shipping and delivery cost, as well as overall profitability. This thesis identifies conditions under which either fulfillment strategy (i.e., from DC or stores) is optimal. And find that the optimal fulfillment strategy is dependent on the total number of stores, unit inventory cost at the stores and DC, unit delivery cost, product prices and number of stores. Case studies based on Manhattan and Los Angeles are provided to further investigate the retailer's fulfillment decision as well as the impacts of its pricing decision, and geographic and cost characteristics. For Manhattan, for both exogenous and endogenous price cases, the regions where store fulfillment are optimal first decrease and then increases as the total number of stores increases. For Los Angeles, the region where store fulfillment is optimal always increases with the total number of stores.

Eaches or Pieces Order Fulfillment, Design, and Operations Handbook

Author : David E. Mulcahy
Publisher : CRC Press
ISBN 13 : 1420013092
Total Pages : 952 pages
Book Rating : 4.4/5 (2 download)

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Book Synopsis Eaches or Pieces Order Fulfillment, Design, and Operations Handbook by : David E. Mulcahy

Download or read book Eaches or Pieces Order Fulfillment, Design, and Operations Handbook written by David E. Mulcahy and published by CRC Press. This book was released on 2007-01-23 with total page 952 pages. Available in PDF, EPUB and Kindle. Book excerpt: If your business uses warehouses to deal with the sales of goods, then you know that facility operations, shipping, and customer service are important to your company's health. Eaches or Pieces Order Fulfillment, Design, and Operations Handbook offers insights for warehouse, distribution, or logistics professionals to make their "eaches or pieces"

Distribution Network Optimization to Reduce Process Variability and Improve Throughput for an Online Retailer

Author : Michael T. Schoder
Publisher :
ISBN 13 :
Total Pages : 90 pages
Book Rating : 4.:/5 (131 download)

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Book Synopsis Distribution Network Optimization to Reduce Process Variability and Improve Throughput for an Online Retailer by : Michael T. Schoder

Download or read book Distribution Network Optimization to Reduce Process Variability and Improve Throughput for an Online Retailer written by Michael T. Schoder and published by . This book was released on 2021 with total page 90 pages. Available in PDF, EPUB and Kindle. Book excerpt: In moving from standard two-day to single-day shipping, Amazon Fulfillment Centers (FC) must stock an increasing variety of product in inventory. Amazon uses a hub and spoke model where Inbound Cross-Dock (IXD) facilities split and ship large quantities of vendor product efficiently to numerous FCs, a process known as transshipment. Depending on the volume of product required for optimal inventory placement at the receiving FC, product may depart an IXD either in its original vendor corrugate case packaging or in an Amazon standard plastic yellow tote if the original case was split apart at the IXD. Furthermore, case and tote containers may be transshipped either in traditional palletized trailers or in floor loads (trailers loaded directly with stacked cases or totes). In an effort to reduce transportation costs, Amazon is transitioning to using floor loads for an increasing proportion of its North American transshipments. Floor loaded trailers enable higher volume utilization by eliminating the gaps between pallets and the pallet material itself, and also reduce the indirect labor associated with palletizing cases and totes at the IXD, and with breaking down pallets at the receiving FC. A hybrid floor load is a trailer that contains both totes and cases mixed together, which provides further flexibility needed to improve product placement and optimize trailer fullness. As Amazon increases IXD throughput and requires each IXD to support an increasing number of destination FCs, hybrid loads have become the norm and continue to increase as a proportion of total transshipments, growing substantially in number between 2019 and 2020. However, while hybrid floor loads bring several advantages, they also increase the complexity and variability within downstream processes, particularly in inbound freight processing at receiving FCs. In particular, newer Amazon Robotics FCs (2019 generation buildings and beyond) use a process known as decant, where product arriving in cases is immediately removed from its corrugate packaging and placed into standard plastic totes to enable uniform processing further down the line. Hybrid loads cause large and unpredictable variability in the inflows of different container types, which results in the decant line often being either over-saturated or starved for work, resulting in inefficient use of labor and lower overall throughput, as well as further compounding effects on dependent downstream processes. Lost labor costs from the decant process alone totaled more than $20M in 2020, and without intervention these costs will continue to increase as Amazon expands its number of decant-enabled sites. The aim of this project was to investigate the root causes of variability in case flow to the decant process, and to assess different means of reducing this variability in a cost-effective and sustainable manner. The research presented in this thesis consisted of four stages: analysis of the current processes to understand the problem, developing hypotheses for potential solutions, testing hypotheses through a combination of simulation modeling and onsite testing, and finally analyzing results to present scalable process change recommendations. This thesis presents results of analysis in three distinct but related areas: FC inbound dock processing, trailer receive scheduling, and IXD trailer loading. Results include a set of process change recommendations to improve FC inbound dock operations, as well as an optimization-based trailer scheduling program to minimize variability across multiple dimensions of inbound product flow. Analysis of the IXD loading process leads to the conclusion that changes to this set of operations would not be cost-effective at this time and should not be undertaken given current constraints. The conclusions in this thesis are specific to Amazon's network, but the models and frameworks presented may be generalized to a wide variety of networked logistics operations, including applications in warehousing, container shipping, and supply distribution.

Order-Fulfillment and Across-the-Dock Concepts, Design, and Operations Handbook

Author : David E. Mulcahy
Publisher : CRC Press
ISBN 13 : 0203998146
Total Pages : 742 pages
Book Rating : 4.2/5 (39 download)

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Book Synopsis Order-Fulfillment and Across-the-Dock Concepts, Design, and Operations Handbook by : David E. Mulcahy

Download or read book Order-Fulfillment and Across-the-Dock Concepts, Design, and Operations Handbook written by David E. Mulcahy and published by CRC Press. This book was released on 2003-12-29 with total page 742 pages. Available in PDF, EPUB and Kindle. Book excerpt: Order-Fulfillment and Across-the-Dock Concepts, Design, and Operations Handbook provides insights and tips that warehouse and distribution professionals can use to make their order fulfillment or across-the-dock operations more efficient and cost-effective. Each chapter focuses on key aspects of planning and managing, making it easy to find informa

Supply Chain Management

Author : Dr. Nitin Junnarkar
Publisher : Archers & Elevators Publishing House
ISBN 13 : 9394958819
Total Pages : 639 pages
Book Rating : 4.3/5 (949 download)

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Book Synopsis Supply Chain Management by : Dr. Nitin Junnarkar

Download or read book Supply Chain Management written by Dr. Nitin Junnarkar and published by Archers & Elevators Publishing House. This book was released on with total page 639 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Multi-Item Online Order Fulfillment

Author : Yanyang Zhao
Publisher :
ISBN 13 :
Total Pages : 52 pages
Book Rating : 4.:/5 (129 download)

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Book Synopsis Multi-Item Online Order Fulfillment by : Yanyang Zhao

Download or read book Multi-Item Online Order Fulfillment written by Yanyang Zhao and published by . This book was released on 2020 with total page 52 pages. Available in PDF, EPUB and Kindle. Book excerpt: The boom of e-commerce in the globe in recent years has expedited the expansion of fulfillment infrastructures by e-retailers. While e-retailers are building more warehouses to offer faster delivery service than ever, the associated fulfillment costs have skyrocketed over the past decade. In this paper, we study the problem of minimizing fulfillment costs, in which an e-retailer must decide which warehouse(s) to fulfill each order from, subject to warehouses' inventory constraints. The e-retailer can split an order, at an additional cost, and fulfill it from different warehouses. It is notoriously challenging to make effective real-time fulfillment decisions at the occurrence of order split, which has become a major problem for e-retailers.We focus on a two-layer distribution network that has been implemented in practice by major e-retailers. We analyze the performance of fulfillment policies that do not rely on demand forecasts. We show that, under an assumption that aligns with the practice of most e-retailers, a myopic policy achieves a constant performance ratio compared to an optimal clairvoyant algorithm. We further show that this ratio is tight. More generally, we characterize the performance guarantees of the myopic policy in terms of the cost parameters of the model. Finally, we complement our theoretical results by conducting a numerical study and demonstrate the good performance of the myopic policy.

Replenishment in an Integrated Stock World

Author : Manuel Martinez Puppo
Publisher :
ISBN 13 :
Total Pages : 62 pages
Book Rating : 4.:/5 (111 download)

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Book Synopsis Replenishment in an Integrated Stock World by : Manuel Martinez Puppo

Download or read book Replenishment in an Integrated Stock World written by Manuel Martinez Puppo and published by . This book was released on 2019 with total page 62 pages. Available in PDF, EPUB and Kindle. Book excerpt: As part of Zara's omnichannel strategy, stock integration between online and offline channels has become a major focus of its operations. Within this context, Zara aims to achieve a channel agnostic stock offering to maximize value across channels. This thesis focuses on the algorithmic design of an integrated system to make replenishment decisions across channels, namely, understanding the value of using online demand to replenish traditional stores to reduce operational costs and improve customer experience. The proposed solution is an optimization-based heuristic that calculates the target stock through the base stock inventory model. Low-online-forecast items are allocated to e-commerce warehouses to ensure the equal risk of local stockouts. High-online-forecast items are allocated across both stores and e-commerce warehouses, trading off the expected value from getting closer to the customer, and the risks and extra costs of inventory decentralization. High-online-forecast items allocation consists of a two-step procedure. First, the effective operational capacity of each location is estimated through simulation. The effective operational capacity is the maximum number of units that can be fulfilled from a location minus the expected number of units fulfilled with in-store excess stock. Second, the optimal allocation of the online base stock to locations is obtained through a stochastic linear program. The heuristic was compared in a small-scale scenario with the clairvoyant full formulation of the problem. The heuristic underperformed the full formulation by 10.3%. In a realistic scale scenario, the heuristic outperformed the single channel approach by 3.5%. Furthermore, a 4.5% improvement was obtained through a 5x increase in the online order preparation capacity. Such a capacity expansion is not only inexpensive but highly encouraged to extract the maximum value from the heuristic.

Assessing Inventory Replenishment Strategy

Author : Lydia S. Thurman
Publisher :
ISBN 13 :
Total Pages : 76 pages
Book Rating : 4.:/5 (131 download)

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Book Synopsis Assessing Inventory Replenishment Strategy by : Lydia S. Thurman

Download or read book Assessing Inventory Replenishment Strategy written by Lydia S. Thurman and published by . This book was released on 2021 with total page 76 pages. Available in PDF, EPUB and Kindle. Book excerpt: Target's supply chain strategy centers around delivering on the in-store experience for customers, with stores serving as both brick and mortar retail locations and online fulfillment hubs for store pick-up orders or home delivery. Traditionally, Target stores only served walk-in customers, and fulfilling in-person and online demand from stores is a new strategy. This omnichannel approach has significant operations impact - they must operate a robust replenishment system that can accurately get the right volume of the right product to the right place at the right time to fulfill demand. Simultaneously, stores must greet and help in-store customers, maintain stocked shelves, and ensure there is physical space as well as adequate labor to fulfill a variety of types of online orders from store stock. Today, when more products than can fit on the shelves are delivered, these products spill over into the backroom. This creates re-work for store employees and drives up store labor costs, while also reducing upstream inventory pooling benefits and amplifying risks of shrinkage. In order to design a replenishment strategy that optimally reduces backroom inventory while maintaining service levels, we examine in this paper three levers that are used to inform the current ordering process: configured leadtime (the time that replenishment logic assumes it will take shipments to arrive in stores after an order is placed), safety stock levels, and shipped unit-of-measure. Examining historic data and testing optimization strategies on that reveals a set of policies which could improve Target's inventory position substantially.

Shelf-Confidence

Author : Thomas W. Gruen
Publisher : iUniverse
ISBN 13 : 1663238502
Total Pages : 468 pages
Book Rating : 4.6/5 (632 download)

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Book Synopsis Shelf-Confidence by : Thomas W. Gruen

Download or read book Shelf-Confidence written by Thomas W. Gruen and published by iUniverse. This book was released on 2022-08-22 with total page 468 pages. Available in PDF, EPUB and Kindle. Book excerpt: Out-of-Stock and unavailable! In 2020, the perfect storm hit when the COVID-19 pandemic caused shoppers to buy food, toilet paper, and other items in a panic. The result was a large number of items were suddenly out of stock, leading to more buying and an outright crisis. This book takes readers behind the scenes of consumer products retailing, uncovering and explaining the extent, the causes, and the shopper reactions to out-of-stock items. The authors draw on their decades of experience studying the availability of consumer goods to explore how to improve service levels, slash costs, boost efficiency, and enhance customer satisfaction. Whether you’re a manufacturer, wholesaler, retailer, retailer consultant, researcher, member of the media, or a member of a trade association, you’ll discover useful insights in this well-researched book. Shoppers will also enjoy learning the behind-the-scenes details of how items get to the shelves, and how often they are out-of-stock! Here is what the consumer goods industry is saying about Shelf-Confidence: “Shelf-Confidence will provide you with an invaluable collection of documented research, tested insights and actionable conclusions from twenty years of studying the out-of-stock issue.” Milan Turk, Jr., former Vice President, the Procter & Gamble Company “This practical book provides industry benchmarks and best practices to improve availability online and offline.” Olaf Koch, former CEO Metro Group, Partner at Zintinus. “The thorough and practical research in this book will help retailers take waste out of the supply chain, improve omni-channel product availability, and change their game.” Sir Terry Leahy, former CEO Tesco Stores

Joint Inventory and Fulfillment Decisions for Omnichannel Retail Networks

Author : Aravind Govindarajan
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (137 download)

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Book Synopsis Joint Inventory and Fulfillment Decisions for Omnichannel Retail Networks by : Aravind Govindarajan

Download or read book Joint Inventory and Fulfillment Decisions for Omnichannel Retail Networks written by Aravind Govindarajan and published by . This book was released on 2019 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: With e-commerce growing at a rapid pace compared to traditional retail, many brick-and-mortar firms are supporting their online growth through an integrated omnichannel approach. Such integration can lead to reduction in cost that can be achieved through efficient inventory management. A retailer with a network of physical stores and fulfillment centers facing two demands (online and in-store) has to make important, interlinked decisions - how much inventory to keep at each location and where to fulfill each online order from, as online demand can be fulfilled from any location. We consider order-up-to policies for a general multi-period model with multiple locations and zero lead time, and online orders fulfilled multiple times in each period. We first focus on the case where fulfillment decisions are made at the end of each period, which allows separate focus on the inventory decision. We develop a simple, scalable heuristic for the multi-location problem based on analysis from the two-store case, and prove its asymptotic near-optimality for large number of omnichannel stores under certain conditions. We extend this to the case where fulfillment is done multiple times within a period and combine it with a simple, threshold-based fulfillment policy which reserves inventory at stores for future in-store demand. With the help of a realistic numerical study based on a fictitious retail network embedded in mainland USA, we show that the combined heuristic outperforms a myopic, decentralized planning strategy under a variety of problem parameters, especially when there is an adequate mix of online and in-store demands. Extensions to positive lead times are discussed.

Optimizing Distribution Center Packing Operations to Reduce Volumetric Shipping Costs

Author : Jessica Elizabeth Harsono
Publisher :
ISBN 13 :
Total Pages : 84 pages
Book Rating : 4.:/5 (12 download)

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Book Synopsis Optimizing Distribution Center Packing Operations to Reduce Volumetric Shipping Costs by : Jessica Elizabeth Harsono

Download or read book Optimizing Distribution Center Packing Operations to Reduce Volumetric Shipping Costs written by Jessica Elizabeth Harsono and published by . This book was released on 2019 with total page 84 pages. Available in PDF, EPUB and Kindle. Book excerpt: Improving the efficiency within a distribution center by reducing waste and optimizing process flow can result in significant cost savings regarding distribution center operation. One area with a large potential for improvement is outbound order packaging. Shipping costs are calculated based on package weight or volume, whichever results in a higher cost. With a finite number of box sizes stocked and available in the distribution center to package orders, some orders will inevitably be shipped in a box that is larger than needed to accommodate the SKUs inside. However, if a custom sized box could be made for every order, then the average box volume per order, and in turn the shipping cost, is reduced. This thesis details an integration plan and impact analysis for adding custom box-making technology to a current packing process flow. It compares the cost, sustainability, and throughput benefits to other solutions such as introducing padded envelopes as a packing option or creating algorithms to assist packers in choosing the most economical stock box while packaging an order.