M.S.THESIS PRESENTATION: ASSORTMENT PLANNING CONSIDERING SPLIT ORDERS

Date/Time
Date(s) - 16/08/2021
10:00 - 12:00

Categories No Categories


Topic: Duygu Söylemez Tez Sunumu

Time: Aug 16, 2021 10:00 AM Istanbul

Join Zoom Meeting
https://zoom.us/j/9937664491?pwd=R0FNalFFZUM0Wm9MaitiYWJrbVhodz09

Meeting ID: 993 766 4491
Passcode: 525871

Abstract: When multi-item orders cannot be satisfied through a single shipment stemming from not having all the items in an order in the same warehouse, the cost of packaging and transportation increases and the delivery of the orders can be delayed. In this regard, split order problem is one of the most significant challenges that the online retailers face. As the capacities of the warehouses are limited, it is not possible to stock every item in every warehouse. To minimize the number of orders that cannot be satisfied in a single shipment, it is important to determine how the limited capacities of the warehouses should be allocated to items or it is necessary to decrease the transportation costs through consolidating the split orders. Since this problem is NP-hard, the previous studies in the literature are based on heuristic algorithms. In this study, exact and heuristic methods have been examined to solve large scale problems. Some of the heuristic algorithms offered uses the LP relaxation of the model provided by Jehl et al. (2018). In this sense, the analytical characterization of the optimal solution of the LP relaxation has also been revealed. It is proved that the allocation variables can only take three different values at most one being fractional. It is shown that this solution can be found without actually solving the LP relaxation by benefiting from an algorithm offered in literature to solve 0-1 fractional programming problems. Moreover, it is proved that a similar characterization is preserved for multiple warehouses or when a central depot with unlimited capacity and a forward distribution center are considered together. Additionally, the working principle of the greedy ranking algorithm  offered in the literature is theoretically justified and a dynamic version of this algorithm is developed. To evaluate the performance of the heuristic algorithms offered and the run time of the integer programming problem, an extensive numerical study has been conducted. The change in the difficulty level of the problem based on the plant capacity, the number of orders, and the number of stock keeping units (SKU) is scrutinized. Furthermore, the assortment allocation problem is modeled together with the consolidation problem. The performance of the model is evaluated through comparing its solution to the solution obtained through solving two problems consecutively.