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    <managingEditor>tris-trb@nas.edu (Bill McLeod)</managingEditor>
    <webMaster>tris-trb@nas.edu (Bill McLeod)</webMaster>
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      <title>Smart Drop-Shipping and Stocking Decision Support System</title>
      <link>https://rip.trb.org/View/2703794</link>
      <description><![CDATA[Drop-shipping is an increasingly important order fulfillment strategy in modern supply chains, allowing firms to reduce inventory holding costs by shipping products directly from suppliers to customers. However, because inventory is not directly controlled by the firm, drop-shipping can introduce uncertainty in product availability, delivery lead times, and service reliability. To compensate, firms often rely on expedited transportation, which increases costs and may negatively affect safety and efficiency in freight operations. These trade-offs create a challenging decision problem: determining which products should be stocked internally, fulfilled through drop-shipping, or managed under a mixed fulfillment strategy.
Industry interviews with a major U.S. wholesaler indicate that firms tend to rely on drop-shipping for slow-moving products due to limited warehouse space and capital constraints, yet lack systematic, data-driven methods to guide these decisions Existing research largely focuses on single-product settings or coordination issues between retailers and suppliers and does not address multi-product decisions under warehouse capacity constraints.
This project aims to fill this gap by developing an optimization-based decision support framework for drop-shipping and inventory planning across multiple stock-keeping units (SKUs). The proposed approach integrates mixed-integer programming with meta-heuristic methods to support large-scale, real-world applications. The model incorporates demand patterns, inventory holding costs, transportation costs, service level requirements, and cash flow constraints. A complementary simulation framework will be developed to evaluate system performance under uncertainty in demand, supplier inventory availability, and delivery times.
The project supports Mid-America Transportation Center (MATC) themes of Safety and Transportation Systems of the Future by enabling more predictable and efficient freight movements, reducing reliance on expedited shipping, and promoting data-driven planning in distributed fulfillment networks. Expected outcomes include an implementable decision support tool, analytical insights for industry stakeholders, and dissemination through publications and conference presentations.]]></description>
      <pubDate>Sat, 16 May 2026 11:49:44 GMT</pubDate>
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