Using an integrated order picking-vehicle routing problem to study the impact of delivery time windows in e-commerce

Abstract

European e-commerce sales are increasing every year. Nowadays, customers buy more frequently online in smaller quantities. Handling this large amount of customer orders puts the logistic activities of the supply chain under pressure. At the same time, customers have high expectations concerning the delivery of their online purchase. In order to meet these expectations at low cost, B2C e-commerce companies have to reconsider their logistic activities. Instead of optimizing every single process of the supply chain, related problems need to be tackled simultaneously. In the integrated order picking-vehicle routing problem(I-OP-VRP), picking lists and vehicle routes are determined simultaneously. One possibility to meet the high expectations of customers is to allow customers to choose the time window in which they want to be delivered. However, the more customers select a time window during the purchasing process, the higher the total costs for the B2C e-commerce company since the company has less flexibility to construct their delivery routes. To cover the cost increase, e-commerce companies often only provide this service at an additional cost. The objective of this paper is to estimate the additional cost of allowing customers to choose a preferred delivery time window using the integrated order picking-vehicle routing problem. An experimental design is set up to investigate this service cost under varying circumstances depending on customer characteristics, time window characteristics and operator size. Based on the results of the ANOVA it can be concluded that the investigated factors have a significant influence on the additional cost of allowing customers to select a delivery time window.

Same‐day deliveries in omnichannel retail: Integrated order picking and vehicle routing with vehicle‐site dependencies

“…Nevertheless, the absolute advantages of the integrated approach are still present (see above). Ramaekers et al (2018) observe a similar development for increasing instance sizes in an integrated picking and vehicle routing problem with time windows.…”

“…A model formulation is presented that aims to minimize total costs composed of variable costs for the proportional wage of regular and additional order pickers, respectively, fixed costs per vehicle used, and variable costs per travel time of a vehicle. Moons, Braekers, Ramaekers, Caris, and Arda (2019) and Ramaekers, Caris, Moons, and van Gils (2018) deal with an identical problem setting. Moons et al (2019) develop a heuristic solution approach and Ramaekers et al (2018) apply the heuristic developed to gain managerial insights regarding time windows.…”

“…Moons, Braekers, Ramaekers, Caris, and Arda (2019) and Ramaekers, Caris, Moons, and van Gils (2018) deal with an identical problem setting. Moons et al (2019) develop a heuristic solution approach and Ramaekers et al (2018) apply the heuristic developed to gain managerial insights regarding time windows. Kuhn et al (2020) integrate order batching, order picking and delivery operations into a simultaneous planning approach when supplying micro stores and gas station convenience stores with perishable and durable goods.…”

A Comprehensive Framework for the Design of Modular Robotic Mobile Fulfillment Systems

“…have been developed for a long time. Besides, operational cost is also investigated by researchers [21]. Reference [22] proposes a collision free path planning algorithm, to generate feasible paths for mobile robots.…”

The future of freight transport

“…Two papers in this Topical Collection were oriented towards the last mile and e-commerce, which is the fastest growing segment and which a clear challenge for all stakeholders. Katrien Ramaekers et al [1] worked out a vehicle routing model to study the impact of delivery time windows in e-commerce. If customers would be allowed to choose the preferred delivery time window, this would considerably influence the costs.…”