The Fulfillment-Optimization Problem

Abstract

AboutSectionsView PDF ToolsAdd to favoritesDownload CitationsTrack CitationsPermissionsReprints ShareShare onFacebookTwitterLinked InEmail Go to Section HomeINFORMS TutORials in Operations ResearchOperations Research & Management Science in the Age of Analytics The Fulfillment-Optimization ProblemJason Acimovic, Vivek F. FariasJason Acimovic, Vivek F. FariasPublished Online:2 Oct 2019https://doi.org/10.1287/educ.2019.0199AbstractThis tutorial studies the fulfillment-optimization problem, a key optimization problem facing retailers that fulfill online customer orders using inventory that might be distributed across multiple supply nodes, which for omnichannel retailers may include the entire store network in addition to distribution centers. This tutorial formulates and studies the fulfillment optimization problem as an online optimization problem. The first approach we study to solving this problem is similar in spirit to linear programming–based bid price approaches to network revenue management. The second approach relies on an algorithm based on the primal-dual schema. The approaches are complementary; the former is suitable in a regime where the demand for products is relatively predictable, whereas the latter is applicable to settings where such predictability is not available. In both cases we describe the practical impact of these solutions at real-world retailers. Finally, we discuss outstanding unsolved problems in the area that we believe can have significant impact on practice.Video of this TutORial from the 2019 INFORMS Annual Meeting in Seattle, Washington, October 20, 2019, is available at https://youtu.be/Pa8mmHbSKBQ. Your Access Options Login Options INFORMS Member Login Nonmember Login Purchase Options Save for later Item saved, go to cart Tutorials in OR, TutorialsNew $20.00 Add to cart Tutorials in OR, TutorialsNew Checkout Other Options Token Access Insert token number Claim access using a token Restore guest access Applies for purchases made as a guest Previous Back to Top Next FiguresReferencesRelatedInformationCited byOrder Fulfillment Under Pick Failure in Omnichannel Ship-From-Store ProgramsSagnik Das, R. Ravi, Srinath Sridhar9 December 2022 | Manufacturing & Service Operations Management, Vol. 0, No. 0Online Matching with Stochastic Rewards: Optimal Competitive Ratio via Path-Based FormulationVineet Goyal, Rajan Udwani29 August 2022 | Operations Research, Vol. 0, No. 0Joint Product Framing (Display, Ranking, Pricing) and Order Fulfillment Under the Multinomial Logit Model for E-Commerce RetailersYanzhe (Murray) Lei, Stefanus Jasin, Joline Uichanco, Andrew Vakhutinsky5 August 2021 | Manufacturing & Service Operations Management, Vol. 24, No. 3 Operations Research & Management Science in the Age of AnalyticsOctober 2019 Article Information Metrics Information Published Online:October 02, 2019 Copyright © 2019, INFORMSCite asJason Acimovic, Vivek F. Farias (2019) The Fulfillment-Optimization Problem. INFORMS TutORials in Operations Research null(null):218-237. https://doi.org/10.1287/educ.2019.0199 Keywordsonline retailingomnichannel retailingfulfillment optimizationinventory controlheuristicsPDF download