Time Slot Management in Attended Home Delivery

Many e-tailers providing attended home delivery, especially e-grocers, offer narrow delivery time slots to ensure satisfactory customer service. The choice of delivery time slots has to balance marketing and operational considerations, which results in a complex planning problem. We study the problem of selecting the set of time slots to offer in each of the zip codes in a service region. The selection needs to facilitate cost-effective delivery routes, but also needs to ensure an acceptable level of service to the customer. We present two fully-automated approaches that are capable of producing high-quality delivery time slot offerings in a reasonable amount of time. Computational experiments reveal the value of these approaches and the impact of the environment on the underlying trade-offs.integer programming;vehicle routing;continuous approximation;e-grocery;home delivery;time slots

E-Fulfillment and Multi-Channel Distribution – A Review

This review addresses the specific supply chain management issues of Internet fulfillment in a multi-channel environment. It provides a systematic overview of managerial planning tasks and reviews corresponding quantitative models. In this way, we aim to enhance the understanding of multi-channel e-fulfillment and to identify gaps between relevant managerial issues and academic literature, thereby indicating directions for future research. One of the recurrent patterns in today’s e-commerce operations is the combination of ‘bricks-and-clicks’, the integration of e-fulfillment into a portfolio of multiple alternative distribution channels. From a supply chain management perspective, multi-channel distribution provides opportunities for serving different customer segments, creating synergies, and exploiting economies of scale. However, in order to successfully exploit these opportunities companies need to master novel challenges. In particular, the design of a multi-channel distribution system requires a constant trade-off between process integration and separation across multiple channels. In addition, sales and operations decisions are ever more tightly intertwined as delivery and after-sales services are becoming key components of the product offering.Distribution;E-fulfillment;Literature Review;Online Retailing

Time Slot Management in Attended Home Delivery

Many e-tailers providing attended home delivery, especially e-grocers, offer narrow delivery time slots to ensure satisfactory customer service. The choice of delivery time slots has to balance marketing and operational considerations, which results in a complex planning problem. We study the problem of selecting the set of time slots to offer in each of the zip codes in a service region. The selection needs to facilitate cost-effective delivery routes, but also needs to ensure an acceptable level of service to the customer. We present two fully-automated approaches that are capable of producing high-quality delivery time slot offerings in a reasonable amount of time. Computational experiments reveal the value of these approaches and the impact of the environment on the underlying trade-offs

An Optimization Approach to the Ordering Phase of an Attended Home Delivery Service

Attended Home Delivery (AHD) systems are used whenever a supplying company offers online shopping services that require that customers must be present when their deliveries arrive. Therefore, the supplying company and the customer must both agree on a time window, which ideally is rather short, during which delivery is guaranteed. Typically, a capacitated Vehicle Routing Problem with Time Windows forms the underlying optimization problem of the AHD system. In this work, we consider an AHD system that runs the online grocery shopping service of an international grocery retailer. The ordering phase, during which customers place their orders through the web service, is the computationally most challenging part of the AHD system. The delivery schedule must be built dynamically as new orders are placed. We propose a solution approach that allows to (non-stochastically) determine which delivery time windows can be offered to potential customers. We split the computations of the ordering phase into four key steps. For performing these basic steps we suggest both a heuristic approach and a hybrid approach employing mixed-integer linear programs. In an experimental evaluation we demonstrate the efficiency of our approaches

When Are Deliveries Profitable? - Considering Order Value and Transport Capacity in Demand Fulfillment for Last-Mile Deliveries in Metropolitan Areas

The paper aims to optimize the final part of a firm’s value chain with regard to attended last-mile deliveries. It is assumed that to be profitable, ecommerce businesses need to maximize the overall value of fulfilled orders (rather than their number), while also limiting costs of delivery. To do so, it is essential to decide which delivery requests to accept and which time windows to offer to which consumers. This is especially relevant for attended deliveries, as delivery fees usually cannot fully compensate costs of delivery given tight delivery time windows. The literature review shows that existing order acceptance techniques often ignore either the order value or the expected costs of delivery. The paper presents an iterative solution approach: after calculating an approximate transport capacity based on forecasted expected delivery requests and a cost-minimizing routing, actual delivery requests are accepted or rejected aiming to maximize the overall value of orders given the computed transport capacity. With the final set of accepted requests, the routing solution is updated to minimize costs of delivery. The presented solution approach combines well-known methods from revenue management and time-dependent vehicle routing. In a computational study for a German metropolitan area, the potential and the limits of value-based demand fulfillment as well as its sensitivity regarding forecast accuracy and demand composition are investigated