A mixed integer linear programming model to support e-fulfillment strategies in warehouse-based supermarket chains

Abstract

The use of the online channel has greatly increased the logistics costs of supermarket chains. Even the difficulty of managing order picking and delivery processes has increased due to the short delivery times and the preservation of perishable products. Against that backdrop, the proposed approach presents a mathematical model for planning the e-fulfillment activities with the objective of ensuring maximum efficiency. The linear programming model has been designed for e-grocers that prepare their online orders at central warehouses. The mathematical model determines both the time windows during which picking and transport should take place and the assignment of trucks to delivery routes. The allocation of online orders is performed taking into account the conservation requirement of each type of product and the availability of means. Considering this planning tool, managers can improve the decision-making process guaranteeing the quality of service while reducing the e-fulfillment cost for joint picking and delivery point of view. Motivated by a cooperation with a supermarket chain, results bring great insight based on the simulation of different logistics alternatives. Companies and researchers can compare the strategy of leveling the workload and the strategy of reducing the number of means, a common alternative in logistics outsourced to third parties. In addition, the different scenarios developed make it possible to determine the substantial savings achieved by modifying the delivery services and advancing the order preparation. As a result, managerial insights are identified highlighting the importance of efficient order planning to improve the profitability of online sales.

Developing an Efficient Model for Online Grocery Order Fulfillment

“…Minimize the difference between the maximum and minimum scheduled workload. [19] Batch order picking…”

Bir süpermarket zincirinde iki seviyeli tedarikçi yönetimli stok problemi için etkili bir sezgisel yöntem

“…Vazquez-Noguerol vd. [53] çevrimiçi kanalda faaliyet gösteren süpermarket zincirlerinde sipariş hazırlama ve nakliye için araçların tahsis edilmesi ve yönetilmesi problemini ele almışlardır. Çalışmada yazarlar online siparişlerini, merkezi depolarda hazırlayan e-bakkallar için doğrusal programlama modeli tasarlanmışlardır.…”

Computational Approaches for Grocery Home Delivery Services

“…As a result of a cooperation with a supermarket chain, Vazquez-Noguerol et al [8], present a MILP model for store-based e-fulfillment strategies with multiple picking locations. The case where the orders are picked at a central warehouse is also elaborated by Vazquez-Noguerol et al [9]. Gayialis et al [18] present a framework for city logistics where the delivery and picking up of goods is considered.…”

“…Deliveries may be dispatched from brick-and-mortar stores where the purchases are picked by store employees and then handed over to a delivery driver [8]. At a certain scale, the utilization of dedicated distribution centers, as commonly used by e-commerce giants, is a reasonable alternative [9]. So-called "dark stores", i.e., supermarkets that are not open to the public but are only used for picking online grocery orders, are a common in-between solution.…”

“…Several weeks up to days/hours before delivery starts the ordering phase, in which the grocery chain accepts orders and starts planning the deliveries. Once all orders are placed (usually days/hours before delivery), the company prepares the accepted orders for delivery during the preparation phase (see Vazquez-Noguerol et al [9] for a model that describes the order picking at a central warehouse). Finally, during the delivery phase, the delivery vehicles execute the orders according to the delivery schedule.…”