Track: Operations Research

Abstract

In ecommerce marketplace, logistic speed has emerged as a critical factor influencing online retail supply chain design. To compete in this virtual arena, picking, packing and shipping single items and small volume orders to customers, needs to be done as efficiently as possible. Orders require delivery to customers - not weekly or bi-weekly as with retail stores, but typically within 24 to 72 hours. In a conventional marketplace supply chain model, the sellers make the goods ready based on customer orders and signal to their logistics partner for a pickup. The supply chain activities typically start with the consolidation of load for a given geography and then distributed within the supply chain network.

In this paper, we propose an analytical model to estimate the sortation wave timings in a marketplace distribution center to optimize transport TAT’s subject to inbound load profile, sortation capacity at a distribution center, transport mode and lane-wise load split and transit time between destinations. The model which has been tested by simulations with different illustrative examples, works on the logic of earliest deadline first scheduling algorithm to maximize the desired objective function. Each destination has a transport cut-off before which its corresponding load needs to be sorted and bagged for dispatch. The model aims to improve the transport TAT’s without increasing the design cost of the distribution center or the transportation network.