Distribution Problems in eCommerce Fulfillment

In this project the research team considers an omnichannel retailer that operates both brick-and-mortar stores and super warehouses. The retailer’s objective is to meet traditional and eCommerce fulfillment demands that can be grouped into three representative modes: shopping in store, ordering on-line and delivering from warehouse or store, ordering on-line and picking up at store. On the supply side, the retailer must decide the inventory at the store, the express delivery capacity, the delivery premium, and the just-in-time inventory replenishment for stores. On the demand side, a consumer must consider in her utility of each fulfillment mode such factors as the cost of transportation, the delivery fee, the cost/risk of shopping in store, and the likelihood of unsatisfactory on-line purchase. The research team formulates this omnichannel fulfillment model as a leader-follower game, in which the leader maximizes the retailer’s profits, and the follower allocates consumer demands between the three channels according to utility maximization. The properties of the problem will be analyzed, and the solution methods will be developed. A case study will be constructed by calibrating a stylized model using empirical data.

Language

• English

Project

• Status: Completed
• Sponsor Organizations:

  Office of the Assistant Secretary for Research and Technology

  University Transportation Centers Program
  Department of Transportation
  Washington, DC  United States  20590
• Principal Investigators:

  Nie, Yu

  Smilowitz, Karen

• Start Date: 20201001
• Expected Completion Date: 20220331
• Actual Completion Date: 20221219
• USDOT Program: University Transportation Centers Program

Subject/Index Terms

• TRT Terms: Case studies; Consumer behavior; Costs; Delivery service; Electronic commerce; Inventory; Physical distribution; Retail trade; Shopping facilities; Warehouses
• Subject Areas: Administration and Management; Data and Information Technology; Finance; Freight Transportation; Highways; Operations and Traffic Management; Planning and Forecasting;

Filing Info

• Accession Number: 01769197
• Record Type: Research project
• Source Agency: Tier 1 Center on Telemobility
• Files: UTC, RIP
• Created Date: Apr 8 2021 11:58AM