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Robust omnichannel retail operations with the implementation of ship-from-store

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  • Jiu, Song

Abstract

In this paper, we consider an omnichannel retailer (o-tailer) selling multiple products through a capacitated retail network over a multi-period horizon, where each inventory facility is equipped with a certain ability to fulfill the orders regardless of the channel. We study omnichannel retail operations with the implementation of ship-from-store to minimize the o-tailer’s expected total cost. At the start of each period, the o-tailer determines how much to replenish each product for each distribution center (DC), and how to allocate its inventory from DCs to different stores. At the end of each period, the o-tailer decides from which DCs and/or stores to fulfill the realized online demands. We formulate the problem as a multi-period stochastic optimization model and adopt a robust two-phase approach (RTA) to solve it. Phase 1 determines the binary replenishment decisions using a target-oriented robust optimization approach, whereas Phase 2 uses a linear decision rule to adaptively determine the replenishment, allocation, and fulfillment quantities. Numerical experiments suggest that the RTA outperforms existing approaches and can efficiently produce good-quality and robust solutions for realistic problem instances. A further sensitivity analysis explores the impacts of various system parameters on the RTA’s performance and the benefits of omnichannel fulfilment.

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  • Jiu, Song, 2022. "Robust omnichannel retail operations with the implementation of ship-from-store," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 157(C).
    • Handle: RePEc:eee:transe:v:157:y:2022:i:c:s1366554521003082
    DOI: 10.1016/j.tre.2021.102550
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    Cited by:

    1. Snoeck, André & Winkenbach, Matthias & Fransoo, Jan C., 2023. "On-demand last-mile distribution network design with omnichannel inventory," Other publications TiSEM 83b06c9f-2a65-4aaf-880b-2, Tilburg University, School of Economics and Management.
    2. Snoeck, André & Winkenbach, Matthias & Fransoo, Jan C., 2023. "On-demand last-mile distribution network design with omnichannel inventory," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 180(C).
    3. Guan, Zhimin & Mou, Yuxia & Zhang, Jun, 2024. "Incorporating risk aversion and time preference into omnichannel retail operations considering assortment and inventory optimization," European Journal of Operational Research, Elsevier, vol. 314(2), pages 579-596.
    4. Feng, Yue & Zhang, Jianxiong & Feng, Lin & Zhu, Guowei, 2022. "Benefit from a high store visiting cost in an omnichannel with BOPS," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 166(C).
    5. Goedhart, Joost & Haijema, René & Akkerman, Renzo & de Leeuw, Sander, 2023. "Replenishment and fulfilment decisions for stores in an omni-channel retail network," European Journal of Operational Research, Elsevier, vol. 311(3), pages 1009-1022.
    6. Lee, Junhyeok & Moon, Ilkyeong, 2024. "A decomposition approach for robust omnichannel retail operations considering the third-party platform channel," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 184(C).
    7. Cheng, Lihong & Guo, Xiaolong & Li, Xiaoxiao & Yu, Yugang, 2022. "Data-driven ordering and transshipment decisions for online retailers and logistics service providers," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 161(C).
    8. Bansal, Vishal & Bisi, Arnab & Roy, Debjit & Venkateshan, Prahalad, 2024. "Integrated inventory replenishment and online demand allocation decisions for an omnichannel retailer with ship-from-store strategy," European Journal of Operational Research, Elsevier, vol. 316(3), pages 1085-1100.

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