Operations optimization for third-party e-grocery platforms

In the era of e-commerce, a new business mode—e-grocery platform has become popular in recent years. An e-grocery platform need not own and operate shops. The platform assigns the orders that customers release on the platform to the part-time couriers; then the couriers go to some nearby shops, buy the commodities required by orders, and deliver them to the orders’ shipping address. This study proposes a mathematical model on selecting and accepting customer orders, assigning the accepted orders to couriers, selecting shops for buying each order’s required commodities, and routing each courier among her/his visited shops and assigned order’s shipping address. Moreover, the uncertain arrivals of future orders is taken into account by the proposed model. For solving the proposed two-stage stochastic integer programming model with the integer recourse function, this study also designs a novel algorithm based on column generation. Based on the real data from platform operators in Shanghai and Hangzhou, numerical experiments are conducted to validate the efficiency of the proposed algorithm. Sensitivity analysis based on the real data are also conducted to derive potentially useful managerial implications for practitioners who operate third-party e-grocery platforms.