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The value of integrating order picking and vehicle routing decisions in a B2C e-commerce environment

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  • S. Moons
  • K. Braekers
  • K. Ramaekers
  • A. Caris
  • Y. Arda

Abstract

In B2C e-commerce sales, customers expect a fast and low-cost delivery. To be able to fulfil these customer expectations, both warehouse and distribution operations have to be performed in an efficient and effective way. Ideally, these two supply chain functions should be considered simultaneously in an integrated problem since they are interrelated. In this paper, a record-to-record travel algorithm is proposed to solve the integrated order picking-vehicle routing problem (I-OP-VRP). Experiments with both small-size and large-size instances are conducted. Furthermore, the integrated approach is compared with an approach in which both problems are solved sequentially. Results show that integration leads to increased service levels, i.e. it allows to shorten the time between placing an order and receiving the goods. On top, the integrated approach leads to costs savings of on average 1.8%. Thus, integration is indispensable for a fast and cost-efficient delivery of goods.

Suggested Citation

  • S. Moons & K. Braekers & K. Ramaekers & A. Caris & Y. Arda, 2019. "The value of integrating order picking and vehicle routing decisions in a B2C e-commerce environment," International Journal of Production Research, Taylor & Francis Journals, vol. 57(20), pages 6405-6423, October.
    • Handle: RePEc:taf:tprsxx:v:57:y:2019:i:20:p:6405-6423
    DOI: 10.1080/00207543.2019.1566668
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    Cited by:

    1. Lam, H.Y. & Ho, G.T.S. & Mo, Daniel Y. & Tang, Valerie, 2023. "Responsive pick face replenishment strategy for stock allocation to fulfil e-commerce order," International Journal of Production Economics, Elsevier, vol. 264(C).
    2. Chevroton, Hugo & Kergosien, Yannick & Berghman, Lotte & Billaut, Jean-Charles, 2021. "Solving an integrated scheduling and routing problem with inventory, routing and penalty costs," European Journal of Operational Research, Elsevier, vol. 294(2), pages 571-589.
    3. Yingyan Zhao & Yihong Zhou & Wu Deng, 2020. "Innovation Mode and Optimization Strategy of B2C E-Commerce Logistics Distribution under Big Data," Sustainability, MDPI, vol. 12(8), pages 1-13, April.
    4. Manuel Ostermeier & Andreas Holzapfel & Heinrich Kuhn & Daniel Schubert, 2022. "Integrated zone picking and vehicle routing operations with restricted intermediate storage," OR Spectrum: Quantitative Approaches in Management, Springer;Gesellschaft für Operations Research e.V., vol. 44(3), pages 795-832, September.
    5. Kuhn, Heinrich & Schubert, Daniel & Holzapfel, Andreas, 2021. "Integrated order batching and vehicle routing operations in grocery retail – A General Adaptive Large Neighborhood Search algorithm," European Journal of Operational Research, Elsevier, vol. 294(3), pages 1003-1021.
    6. Paul, J. & Agatz, N.A.H. & Fransoo, J.C., 2021. "Towards Profitable Growth in E-Grocery Retailing - the Role of Store and Household Density," ERIM Report Series Research in Management ERS-2021-009-LIS, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    7. Jamili, Negin & van den Berg, Pieter L. & de Koster, René, 2022. "Quantifying the impact of sharing resources in a collaborative warehouse," European Journal of Operational Research, Elsevier, vol. 302(2), pages 518-529.

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