Enhancing e-grocery order fulfillment: improving product availability, cost, and emissions in last-mile delivery

Abstract

This paper studies e-grocery order fulfillment policies by leveraging both customer and e-grocery-based data. Through the utilization of historical purchase data, product popularity trends, and delivery patterns, allocation strategies are informed to optimize performance metrics such as fill rate, carbon emissions, and cost per order. The study aims to conduct a sensitivity analysis to identify key drivers influencing these performance metrics. The results highlight that fulfillment policies optimized with the utilization of the mentioned data metrics demonstrate superior performance compared to policies not informed by data. These findings underscore the critical role of integrating data-driven models in e-grocery order fulfillment. Based on the outcomes, a grocery allocation policy, considering both proximity and product availability, emerges as promising for simultaneous improvements in several performance metrics. The study recommends that e-grocery companies leverage customer data to design and optimize delivery-oriented policies and strategies. To ensure adaptability to new trends or changes in delivery patterns, continual evaluation and improvement of e-grocery fulfillment policies are emphasized.