Lot-sizing Models Of Replenishment And Delivery For Online Retailers

With the flourishing development of e-commcrce, more and more online retailers are emerging. The boom of online retailing brings not only opportunities, but also challenges to retailing operations. Most online retailers operate on thin margins. Thereby, lowering the cost related to operations activities by scientific management methods could be very significant in such a competitive environmentThe operating cost of online retaiclrs mainly comes from series of activities that related to order fulfillment. The costs of inventory replenishment and order shipping are the majority part However, few studies in the literature focus on these two problems. Furthermore, most online retailers have implemented MRP system with core modular of BOM-based lot-sizing models to manage their inventory planning pro-cess. In such contexts, this research develops several lot-sizing models that involve key features of online retailing to help them to optimize the decisions of replenishment and order shipping in a dynamically competitive environment. Specifically, the work of this study are fourfolds:First, based on the operating mode and the means of order fulfillment, we conduct a thorough analysis on the properties of online retailer. Then we introduce the supply chain structure which regards the order fulfillment center as the core department in a systematic way. Particularly, we divide the supply chain into three parts:the replenishement system in the upper stream, the order fulfillment system in the central stream, and the delivery system in the down stream. Besides, we thoroughly analyze operational probelms in each part Finally, we focus on discussing the replenishement problem and order shipping problem in online retailing.Second, considering the typical property that customers'demand will be delayed to fulfill in online retailing, we introduce the concept of advance demand information (ADI) into inventory replenishment planning problems for retailers with online channels in four scenarios:(1) companies act as pure-play online retailers with customers homogeneous in demand lead time, (2) online customers are heteroge-neous in demand lead time with priorities, (3) retailers operate in a bricks and clicks structure, in which demands come from independent online and offline channels, and (4) retailers have interactive online and offline channels, which means that customers place orders online can choose to pick them in an offline store. At the meanwhile, we incorporate ADI into dynamic lot-sizing models to formulate the replen-ishment planning problems for retailers in each scenario. Besides, we compare the relations among the models. Furthermore, from the perspective of demand time window, we develop a unified model through reformulation to solve problems in all scenarios. Based on the optimality properties, we design a dy-namic programming algorithm with polynomial running time to solve the unified model. The numerical experiments for several online retailers find that the method can significantly reduce the total inventory cost.Third, Based on the characteristics that online advance-selling new products have short selling sea-sons, and that retailers can fully backlog the demands arriving in the pre-selling season, this paper studies both one-ordering policy and two-ordering policy with initial stock-out for advance selling products con-ditional on whether the pre-selling season is fixed. Analyses for the two policies gave the optimal solutions alternatively. By the numerical experiment, we successfully obtain the optimal one-ordering policy under unfixed pre-selling season and the optimal two-ordering policy under fixed pre-selling season. The results suggest that online retailers can use the methods of this study to find the optimal ordering scheme under different advance selling strategies with the parameters of different products.Finally, in a new application of "anticipatory shipping", this paper deals with a dynamic batch deliv-ery problem for online retailers, in which two shipping modes of common carrier and private carrier are configruated between the order fulfillment center and hubs. A two-echelon dynamic batch delivery model is firstly developed through mixed integer programming. Then the model is reformulated through net-work flow representation. By analyzing the network flow model, we obtain several optimality properties. Based on these properties, we develop a dynamic programming algorithm with polynomial running time of O(T2). At last, this study uses a numerical case to verify and validate the effectiveness and applicability of the proposed method.