Chance Constrained Optimization for Targeted Internet Advertising

We introduce a chance constrained optimization model for the fulfillment of guaranteed display Internet advertising campaigns. The proposed formulation for the allocation of display inventory takes into account the uncertainty of the supply of Internet viewers. We discuss and present theoretical and computational features of the model via Monte Carlo sampling and convex approximations. Theoretical upper and lower bounds are presented along with a numerical substantiation

The Future of Retail Operations

Retailing consists of all the activities associated with the selling of goods to the final consumer. In this article, we review the research on retail operations published in Manufacturing & Service Operations Research (M&SOM) since 1999. We then discuss the current retail landscape and the new research directions it offers, in which M&SOM can play a prominent role

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

The significance of logistics in servicing growing volumes of e-commerce

Purpose: The article highlights the multi-task nature and prospects of the development of the transit potential of warehouse logistics systems, reveals the theoretical and methodological foundations of logistics in the storage and cargo handling system, indicates and confirms the importance of warehousing logistics in the context of servicing the growing volumes of electronic commerce. Design/Methodology/Approach: For the purposes of developing logistics in the storage and cargo handling system we study the technical and technological support and design developments that have significant potential for increasing the efficiency of logistics processes, and to study consumer behavior in the warehouse services market and transport market trends - warehouse activities. Findings: Automation significantly simplifies logistics processes, information exchange, remote control and management, optimizes costs by combining various market entities and objects, target groups and parameters of logistics processes on electronic platforms. Integration in modern logistics allows synchronizing the complex information component of electronic services and platforms and activating the formation of a system interface that is common for all elements of the logistics system of warehousing, cargo processing and inventory management. Practical implications: The results of the study can be implemented in the activities of Russian companies in order to develop the transit potential of warehouse logistics systems. Originality/value: The significance of this study lies in shifting the emphasis to the need to switch to improved customer service systems taking into account the needs and development of online retail and fulfillment of logistics operators (full-cycle operator: taking goods from the customer’s warehouse, responsible storage, packaging, delivery, work with returns), tied to the development of infrastructure, as the foundation for increasing the efficiency, speed and quality of logistics processes.peer-reviewe

Distributed bounded-error state estimation for partitioned systems based on practical robust positive invariance

We propose a partition-based state estimator for linear discrete-time systems composed by coupled subsystems affected by bounded disturbances. The architecture is distributed in the sense that each subsystem is equipped with a local state estimator that exploits suitable pieces of information from parent subsystems. Moreover, differently from methods based on moving horizon estimation, our approach does not require the on-line solution to optimization problems. Our state-estimation scheme, that is based on the notion of practical robust positive invariance developed in Rakovic 2011, also guarantees satisfaction of constraints on local estimation errors and it can be updated with a limited computational effort when subsystems are added or removed

Essays on E-Commerce and Omnichannel Retail Operations

The advent of e-commerce has impacted the retail industry, as retail firms have innovated in response to customers increasingly preferring to purchase products online. This dissertation studies operational problems that accompany such retail innovations, and provides tractable heuristic solutions developed using stochastic and robust optimization methods. In particular, the first two chapters focus on the value of fulfillment flexibility - online orders can be fulfilled from any node in the firm's fulfillment network. The first chapter is devoted to omnichannel retailing, where e-commerce demand is integrated with the physical network of stores through ship-from-store fulfillment. For a retailer with a network of physical stores and fulfillment centers facing two demands (online and in-store), we consider the following interlinked decisions - how much inventory to keep at each location and where to fulfill each online order from. We show that the value of considering fulfillment flexibility in inventory planning is highest when there is a moderate mix of online and in-store demands, and develop computationally fast heuristics with promising asymptotic performance for large scale networks, which are shown to improve upon traditional strategies. The second chapter considers a pure play e-commerce fulfillment network, and studies the inventory placement decision. As e-commerce demands are volatile due to a variety of factors (price-matching, recommendation engines, etc.), we consider a distributionally robust setting, where the objective is to minimize the worst-case expected cost under given mean and covariance matrices of the underlying demand distribution. For this NP-hard problem, we develop computationally tractable heuristic in the form of a semi-definite program, with dimension quadratic in the size of the network. In the face of distribution uncertainty, we show that the robust heuristic outperforms inventory solutions that assume incorrect distributions. The final chapter offers a new take on a classic problem in retail - customer returns, which has grown to be an important issue in recent times with firms competing to provide lenient and convenient return policies to boost their e-commerce sales. However, several customers take advantage of such policies, which can lead to loss in revenue and increase in inventory costs. We study different return policies that a firm can employ depending on the information about customers' return behavior that is available to the firm. We derive the structure of the optimal return policies and show that personalizing return policies based on customers' historical data can significantly improve the firm's profits, but allows the firm to extract all customer surplus.PHDBusiness AdministrationUniversity of Michigan, Horace H. Rackham School of Graduate Studieshttps://deepblue.lib.umich.edu/bitstream/2027.42/153348/1/arav_1.pd