Date: 17 May 2019, Friday
Place: Faculty of Business Administration,
Ümit Berkman Seminar Room (MA-330)
“Order Fulfillment Policies for Ship-from-Store Implementation in Omni-Channel Retailing”
Abstract: One of the recent trends in omni-channel retailing is ship-from-store which allows a retailer to fulfill online orders by using inventory from a nearby brick-and-mortar store. The benefits of this relatively new fulfillment model include faster delivery, lower transportation costs, higher in-stock probability, increased sales and customer satisfaction, etc. Despite its many benefits, this fulfillment model introduces many new operational challenges to the retailer, including the need to identify from which location to fulfill an online order when it arrives. Best Buy, Macy’s, and Walmart are some of the retailers that successfully integrate ship-from-store into their fulfillment strategies. In this study, we consider a retailer having both online and store operations, with each channel carrying its own inventory. Store orders are fulfilled from store inventories, whereas an online order can be shipped either from an online fulfillment center or from any other store location that maximizes the retailer’s overall profit. Our study investigates dynamic fulfillment decisions: from which location to fulfill an online order when it arrives. We incorporate the uncertainty both in demand and in the cost of shipment to individual customers. We develop a stochastic dynamic framework and characterize the optimal cross-channel fulfillment policy. Due to the optimal policy being computationally intractable for large-sized problems, we construct an intuitive heuristic policy to guide the retailers in their fulfillment decisions. Our computational experiments indicate that the proposed heuristic method is both computationally efficient and effective for the cross-channel fulfillment problem.
Bahriye Cesaret is an Assistant Professor at the Faculty of Business at Özyeğin University. She received her B.S. in Industrial Engineering (2008) from Istanbul Technical University, and M.S. in Industrial Engineering (2010) from Koç University. In 2010, she joined the Ph.D. program in Management Science at the University of Texas at Dallas (UTD). During her pursuit of Ph.D., she earned an M.B.A. (2013) and an M.S. degree in Supply Chain Management (2013) from UTD. She completed her Ph.D. in Management Science (with a concentration in Operations Management) in 2015. She received an ‘Outstanding Student Teacher Award’ from the Naveen Jindal School of Management for the academic year 2013-2014. Her current research lies in two main streams: Behavioral and Retail Operations Management