The Benefits of Flexible Fulfillment Center Assignments in Attended Home Delivery

Seifried, Kilian ; Agatz, Niels ; Fleischmann, Moritz

Document Type: Conference presentation
Year of publication: 2017
Conference title: Last-Mile Delivery Workshop
Location of the conference venue: Mannheim, Germany
Date of the conference: 23 June 2017
Publication language: English
Institution: Business School > ABWL u. Logistik (Fleischmann 2009-)
Subject: 650 Management
Classification: MSC: 90B06,
Abstract: Attended home delivery in narrow time windows is the prevailing service model in internet grocery retailing. E-grocers typically serve their customers from one or more dedicated e-fulfillment centers. To simplify planning, each fulfillment center is often responsible for a fixed delivery region. In this contribution, we investigate the benefits of allowing flexibility in the assignment customers to fulfillment centers from a routing perspective. The underlying routing problem can be characterized by a multi-depot vehicle routing problem with time windows. We analyze the advantages of a flexible assignment as compared to a decomposed planning per fulfillment center by using a new exact mixed-integer programming model and a state-of-the-art heuristic. In addition, we investigate the impact of different factors on this benefit and the associated solutions.

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