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Package consolidation approach to the split-order fulfillment problem of online supermarkets

  • Published:
Journal of the Operational Research Society

Abstract

The split-order fulfillment problem has been a new key issue for online supermarkets. Multi-item orders to be fulfilled by multiple warehouses are split into several suborders and delivered with multiple shipments, increasing transportation cost. This paper presents a powerful order fulfillment method—package consolidation—in which two or more stock-keeping units (SKUs) in the suborders of one order will be packed into fewer packages through lateral transshipment. We propose a consolidation model and a packing model to determine which SKUs in suborders should be transshipped for package consolidation. In addition, we develop a modified first fit decreasing (FFD) algorithm to solve the packing model and a heuristic algorithm based on the breadth-first search strategy with cutting, long-sight and suborder rules to generate near optimal order fulfillment schemes in a reasonable time. The computation results verify the superiority of the package consolidation approach in solving split-order fulfillment problem. Moreover, our sensitivity analyses provide managerial insights for online supermarkets.

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Acknowledgements

We sincerely thank the editor and the referees for their constructive comments. This research was supported by program of the National Natural Science Foundation of China (71571067; 71201014; 71201055), the innovative research group program of the National Natural Science Foundation of China (71421001).

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Authors and Affiliations

  1. Institute of Systems Engineering, Dalian University of Technology, No.2 Linggong Road, Ganjingzi District, Dalian City, 116024, Liaoning Province, China

    Yuankai Zhang, Xiangpei Hu & Lijun Sun

  2. School of Economics and Management, North China Electric Power University, Beijing, China

    Minfang Huang

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  1. Yuankai Zhang
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  2. Minfang Huang
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  3. Xiangpei Hu
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  4. Lijun Sun
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Correspondence to Yuankai Zhang.

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Zhang, Y., Huang, M., Hu, X. et al. Package consolidation approach to the split-order fulfillment problem of online supermarkets. J Oper Res Soc (2017). https://doi.org/10.1057/s41274-017-0230-7

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