E-fulfillment and multi-channel distribution - A review
---
paper_title: The Diffusion of Electronic Business in the United States

paper_content:

The authors provide a recent account of the diffusion of electronic business in the U.S. economy using new data from the U.S. Bureau of the Census. They document the extent of the diffusion in three main sectors of the economy: retail, services, and manufacturing. For manufacturing, they also analyze plants' patterns of adoption of several Internet-based processes and conclude with a look at the future of the Internet's diffusion and a prospect for further data collection by the U.S. Census Bureau.
---
paper_title: Customer retailer loyalty in the context of multiple channel strategies

paper_content:

Abstract With an increasingly competitive retail environment and decreasing customer switching costs, customer retailer loyalty is a critical goal for merchants of all types. We investigate customer retailer loyalty in the context of multiple channel retailing strategies. Results show that multiple channel retail strategies enhance the portfolio of service outputs provided to the customer, thus enhancing customer satisfaction and ultimately customer retailer loyalty. These results suggest that multiple channel retailing can be a useful strategy for building customer retailer loyalty.
---
paper_title: Get the right mix of bricks & clicks.

paper_content:

The bright line that once distinguished the dot-com from the incumbent is rapidly fading. Success in the new economy will go to those who can execute clicks-and-mortar strategies that bridge the physical and virtual worlds. But how executives forge such strategies is under considerable debate. Despite the obvious benefits that integration offers--cross-promotion, shared information, purchasing leverage, distribution economies, and the like--many executives now assume that Internet businesses have to be separate to thrive. They believe that the very nature of traditional business--its protectiveness of current customers, its fear of cannibalization, its general myopia--will smother any Internet initiative. Authors Ranjay Gulati and Jason Garino contend that executives don't have to make an either- or choice when it comes to their clicks-and-mortar strategies. The question isn't, "Should we develop our Internet channel in-house or launch a spin-off?" but rather, "What degree of integration makes sense for our company?" To determine the best level of integration for their companies, executives should examine four business dimensions: brand, management, operations, and equity. Drawing on the experiences of three established retailers--Office Depot, KB Toys, and Rite Aid--the authors show the spectrum of strategies available and discuss the trade-offs involved in each choice. By thinking carefully about which aspects of a business to integrate and which to keep distinct, companies can tailor their clicks-and-mortar strategy to their own particular market and competitive situation, dramatically increasing their odds of e-business success.
---
paper_title: Modeling Conflict and Coordination in Multi-Channel Distribution Systems: A Review

paper_content:

For any company with a product to sell, how to make that product available to the intended customers can be as crucial a strategic issue as developing the product itself1. While distribution channel choice is a very traditional concern, for many companies it has recently come under intense scrutiny due to a number of major developments. The expanding role of the Internet in consumer and business procurement activity has created new opportunities for access to customers. Information and materials handling technologies have broadened the feasible set of sales and distribution activities that a producer might reasonably perform. The economics of materials delivery has been transformed by the pervasive logistical networks deployed by third-party shipping powerhouses such as Federal Express and United Parcel Services. As a result, many manufacturers are reconsidering their approaches to distribution, with particular attention to the role of intermediaries2.
---
paper_title: The customer has escaped.

paper_content:

Traditional go-to-market strategies don't work because they assume customers will stay in the channels that were designed for them. Time for a fresh look at how shoppers really behave.
---
paper_title: Managing channels of distribution in the age of electronic commerce

paper_content:

Abstract The emergence of electronic commerce (e-commerce) has created a new business paradigm, one that presents marketers with noteworthy opportunities and challenges. Perhaps the greatest impact is in the area of channel management. The top issue for many business-to-business (B2B) firms today is channel conflict. In this paper, we investigate the effect of introducing the Internet channel into an already complex, multichannel distribution system from the perspective of the supplier firm. We describe strategies for proactively managing conflict, both externally with channel partners and internally among the subunits responsible for managing the channels. Twelve propositions for research are developed; eight relate directly to the marketing mix and four focus on channel communication and coordination. All of the research propositions offered are mechanisms by which suppliers can influence the level of channel conflict they experience. Dedicated channel management groups, documentation of channel strategies, and superordinate goals are identified as strategies for minimizing unwanted conflict.
---
paper_title: Models for Supply Chains in E-Business

paper_content:

Supply chain management is likely to play an important role in the digital economy. In this paper, we first describe major issues in traditional supply chain management. Next, we focus our attention on the supply chain issues of visibility, supplier relationships, distribution and pricing, customization, and real-time decision technologies that have risen to importance with the prevalence of e-business. We present an overview of relevant analytical research models that have been developed in these areas, discuss their contributions, and conclude with a discussion on future modeling opportunities in this area.
---
paper_title: Multiple channel systems in services: pros, cons and issues

paper_content:

The number of companies in the services sector making use of two or more channels of distribution to market their products is increasing steadily, and this strategy is expected to become the dominant channel design. Nonetheless, research on the design of multiple channel systems is decidedly sparse. This article attempts to make a contribution to this topic by discussing the possible benefits of a multi-channel distribution strategy, the possible drawbacks and by discussing a number of issues that emerge. Finally the potential contribution of a number of research perspectives to a better understanding of the drivers of a multiple channel system is discussed.
---
paper_title: E‐logistics and the natural environment

paper_content:

Organizations realize that a strong supporting logistics or electronic logistics (e‐logistics) function is an important organizational offering from both the commercial and the consumer perspective. The implications of e‐logistics models and practices cover the forward and reverse logistics functions of organizations. They also have a direct and profound impact from an environmental perspective. Focuses on a discussion of forward and reverse e‐logistics and their relationship to the natural environment. The issues analyzed include those of traditional green logistics and supply chain management functions such as: inventory management, transportation, warehousing, delivery management, supplier management, packaging and order management. Issues relevant to each of these major areas from the electronic commerce and natural environment overlap are discussed. Examples of practices and results are integrated. Environmental issues facing reverse e‐logistics are also described. Brings to the forefront the reverse e‐logistics function, which has been selcom studied even from a non‐environmental perspective. After discussion of the many pertinent issues in these areas, direction of practice and implications for study and research are then presented.
---
paper_title: Modeling Conflict and Coordination in Multi-Channel Distribution Systems: A Review

paper_content:

For any company with a product to sell, how to make that product available to the intended customers can be as crucial a strategic issue as developing the product itself1. While distribution channel choice is a very traditional concern, for many companies it has recently come under intense scrutiny due to a number of major developments. The expanding role of the Internet in consumer and business procurement activity has created new opportunities for access to customers. Information and materials handling technologies have broadened the feasible set of sales and distribution activities that a producer might reasonably perform. The economics of materials delivery has been transformed by the pervasive logistical networks deployed by third-party shipping powerhouses such as Federal Express and United Parcel Services. As a result, many manufacturers are reconsidering their approaches to distribution, with particular attention to the role of intermediaries2.
---
paper_title: Handbook of quantitative supply chain analysis : modeling in the e-business era

paper_content:

1. Introduction Part I. Supply Chain Analysis-Models and Paradigms 2. Game Theoretic Applications in Supply Chain Analysis 3. Supply Chain Intermediation: A Bargaining Theoretic Paradigm 4. Decentralized Decision Making in Dynamic Technological Systems: The Principal-Agent Paradigm Part II. Auctions and Bidding 5. Auctions, Bidding and Exchange Design 6. Auction and Pricing in Electronic Marketplaces 7. Design of Combinatorial Auctions Part III. Supply Chain Operations in eBusiness 8. The Marketing-Operations Interfaces 9. Coordination of Pricing and Inventory Decisions: A Survey and Classification 10. Collaborative Forecasting and Its Impact on Supply Chain Performance 11. Available to Promise 12. Due Date Management Policies Part IV. Multi-Channel Coordination 13. Modeling Competition and Conflict in Multiple Channel Distribution Systems: A Review 14. Supply Chain Choice for Internet Retailers 15. Coordinating Traditional and Internet Channels Part V. Supply Networks, IT, and Financial Services 16. Using a Structural Equations Modeling Approach to Design and Monitor Strategic International Facility Networks 17. Integrated Production and Distribution Operations: Taxonomy, Models, and Review 18. Next Generation ERP Systems: Scalable and Decentralized Paradigms 19. Delivering e-Banking Services: An Emerging Internet Business Model and a Case Study
---
paper_title: Customer Orientation in Advanced Planning Systems

paper_content:

Customer satisfaction is a major objective of Supply Chain Management. This also applies to “Advanced Planning Systems” (APS), computerized planning systems which try to support the various planning processes to be tackled in supply chains. “Order Promising” and “Demand Fulfillment” software modules of these systems are helpful in promising short and reliable customer order delivery dates and in tracking customer orders along the whole process between order entry and order delivery.
---
paper_title: Identifying the success factors in e-grocery home delivery

paper_content:

Efforts in the electronic grocery shopping, i.e. e‐grocery business, focus especially on the physical distribution of the goods. For example, in the USA there are several e‐grocery service providers with various operating concepts and offering various service levels. The home delivery concept of Streamline is based on a reception box at the customer’s garage or home yard enabling unmanned reception. In contrast, WebVan has launched a home delivery concept where the customer can select a convenient half an hour delivery time window. Various service concepts have been implemented and offered, but has anyone really analysed the differences in cost structures of these two and of other concepts in between the two extremes? Investigates existing home delivery service concepts from different angles and presents concrete simulation results of various parameters representing several home delivery service levels. Eventually, identifying the parameters will give guidelines for the future development of the e‐grocery home delivery services.
---
paper_title: E‐fulfillment: the strategy and operational requirements

paper_content:

An e‐fulfillment system is designed to meet the high order volume and stringent customer service requirements of global business‐to‐consumer e‐commerce. The system converts the traditional warehouse into a multi‐channel e‐fulfillment center. In the e‐commerce environment, some of the toughest decisions must be made on little or no hard information. In this study, the nature of e‐business and the typical fulfillment process are discussed. The authors further examine the strategy and operational requirements for e‐fulfillment. This article is concluded with the implication of a successful e‐fulfillment system, a suggested design of an e‐fulfillment center, and the future research focuses.
---
paper_title: Distribution Logistics: Advanced Solutions to Practical Problems

paper_content:

1: Networks.- An Exact Column Generation Approach to the Capacitated Facility Location Problem.- Modelling Warehouses in Logistical Networks.- Supply Chain Optimisation in Animal Husbandry.- Online-Shopping and Changes in Mobility.- 2: Vehicle Routing.- A Real-time Vehicle Routing Model for a Courier Service Problem.- Collection of Waste with Single Load Trucks: A Real Case.- Planning and Controlling Daily Deliveries to the Same Clients: Problems and Adequate Solutions.- Planning the Incorporation of Logistics Service Providers to Fulfill Precedence- and Time Window-Constrained Transport Requests in a Most Profitable Way.- 3: Warehousing.- Vehicle Online Dispatching Rules in Practice.- Travel Distance Estimation in Single-block ABC-Storage Strategy Warehouses.- 4: Reverse Logistics.- The Impact of Constraints in Closed-loop Supply Chains: The Case of Reusing Components in Product Manufacturing.- E-business and Circular Supply Chains: Increased Business Opportunities by IT-based Customer Oriented Return-flow Management.- Reverse Logistics: A Review of Case Studies.- List of Contributors.
---
paper_title: A genetic algorithm approach to developing the multi-echelon reverse logistics network for product returns

paper_content:

Traditionally, product returns have been viewed as an unavoidable cost of doing business, forfeiting any chance of cost savings. As cost pressures continue to mount in this era of economic downturns, a growing number of firms have begun to explore the possibility of managing product returns in a more cost-efficient manner. However, few studies have addressed the problem of determining the number and location of centralized return centers (i.e., reverse consolidation points) where returned products from retailers or end-customers were collected, sorted, and consolidated into a large shipment destined for manufacturers' or distributors' repair facilities. To fill the void in such a line of research, this paper proposes a nonlinear mixed-integer programming model and a genetic algorithm that can solve the reverse logistics problem involving product returns. The usefulness of the proposed model and algorithm was validated by its application to an illustrative example dealing with products returned from online sales.
---
paper_title: Interpreting Dimensions of Consumer Trust in E-Commerce

paper_content:

Consumer trust in an Internet vendor is an issue commanding ever more attention. Based on an extensive review of literature, this paper proposes dimensions of trust in an Internet vendor. These are competence, integrity and benevolence. Competence refers to a company's ability to fulfill promises made with the consumers. Integrity suggests that a company acts in a consistent, reliable, and honest manner. Benevolence is the ability of a company to hold consumer interests ahead of its own self-interest and indicates sincere concern for the welfare of the customers. In a further analysis various sources where trust might reside are also identified. Drawing on the literature in marketing and general management, the sources of trust are classified as characteristics of the consumer, the firm, the website and the interaction between the consumer and the firm. Given the dimensions and sources of trust, a path model for developing consumer trust in E-commerce is suggested. This research makes a contribution to the development of a theoretical understanding of trust in E-commerce. Although the concepts presented in this paper can be used to carry out further empirical research, they can also be used by practitioners to identify particular trust characteristics for realizing the potential of business to consumer E-commerce venture.
---
paper_title: Developing Cost-effective Operations for the e-Grocery Supply Chain

paper_content:

Cost-effectiveness in the e-grocery supply chain, especially in last mile operations from the distribution centre or store to the customer location, has become a major challenge. The existing e-grocers have developed different kinds of logistical improvements to maintain better customer service and lower costs in the supply chain. However, in spite of the promising development of the e-grocery business, there are only a few e-grocers who have made improvements successfully leading to profitable operations. If e-grocers want to reach a significant market share, they have to achieve lower supply chain costs as well as a wider customer base. To do this, operations in the supply chain have to be improved radically and linked together successfully. In addition, strong supplier and customer relationships are needed. This paper identifies existing operational models and presents suggestions as to how e-grocers can develop more effective operations for the supply chain. The effects of different receiving alternat...
---
paper_title: Physical distribution service quality in Internet retailing: Service pricing, transaction attributes, and firm attributes

paper_content:

This paper develops a theoretical framework and empirically investigates physical distribution service (PDS) quality by Internet retailers in their transactions with consumers. An analysis of data that measure hundreds of electronic commerce transactions along with data at the firm level shows that higher shipping and handling charges are good indicators of better PDS quality. Other transaction-level conditions and firm-level attributes also affect PDS quality, as measured by availability, timeliness, and reliability. Most notably, when the net price of products transacted increases, PDS reliability and availability decline. Furthermore, Internet-retailer size is found to favor PDS availability whereas, surprisingly, newer Internet retailers exhibit a higher level of PDS availability than many of their incumbent competitors.
---
paper_title: Physical distribution considerations for electronic grocery shopping

paper_content:

Electronic grocery shopping (EGS) with direct home delivery is gradually becoming an option for busy families. The early EGS operators offer service built on top of the traditional grocery shop and the Internet is only used as a communication tool to transmit the customer order. To become a viable option for consumers the EGS has to be supported by a completely new logistics structure in which the Internet is used to connect all parties in the supply chain to the same real time information. As a result, the supply chain, all the way from the supplier to the household, needs to be redesigned. In the USA, dedicated EGS companies have entered the marketplace with investors backing them up. Huge losses are experienced in the battle against the traditional players. In smaller markets the funds needed for this kind of action are not easy to generate. Describes an evolutionary model for traditional grocery traders to start EGS gradually, mainly based on investments already made. Studies, in detail, the cost structure of some essential elements of the new supply chain and presents the initial results.
---
paper_title: Quantitative Approaches To Distribution Logistics And Supply Chain Management

paper_content:

Thank you for reading quantitative approaches to distribution logistics and supply chain management. Maybe you have knowledge that, people have search numerous times for their favorite books like this quantitative approaches to distribution logistics and supply chain management, but end up in harmful downloads. Rather than enjoying a good book with a cup of tea in the afternoon, instead they juggled with some malicious bugs inside their desktop computer.
---
paper_title: An exploratory analysis of extended grocery supply chain operations and home delivery

paper_content:

This article examines ordering and delivery data from several home delivery grocers in both the USA and the UK. Contrary to popular perceptions, the demise of home delivery grocers (or Internet grocers as they were known during the artificial boom period of 1997‐2000) was exaggerated. In fact, sales for grocery home delivery are currently at least 50 per cent higher than their “peak” in 2000. This article examines the operational challenges involved in offering this value‐added service to consumers and posits the argument that prior efforts (notably Webvan) failed in large part due to poor operational execution and poorly planned business models. Closes with some insights regarding the problems which must be addressed if this extended grocery channel is to become successful in the long run.
---
paper_title: Reverse logistics : quantitative models for closed-loop supply chains

paper_content:

1 A Framework for Reverse Logistics.- 2 Quantitative Models for Reverse Logistics Decision Making.- 3 Managing Product Returns: The Role of Forecasting.- 4 Reverse Logistics Network Design.- 5 Collection and Vehicle Routing Issues in Reverse Logistics.- 6 Product Returns: Handling and Warehousing Issues.- 7 Lot Sizing Decisions in Product Recovery Management.- 8 Stochastic Inventory Control for Product Recovery.- 9 Managing Dynamic Product Recovery.- 10 Production Planning for Product Recovery Management.- 11 Valuation of Inventories in Product Recovery Systems.- 12 Coordination in Closed-Loop Supply Chains.- 13 Long-term Analysis of Closed-loop Supply Chains.- 14 LCA for Evaluating End-of-life Options of Spent Products.- 15 Models for Eco-eco Closed-loop Supply Chain Optimization.- 16 ICT Enabling Reverse Logistics.- Append.- Notation.- References.
---
paper_title: Research Note: Customer Intimacy and Cross-Selling Strategy

paper_content:

Better targeting opportunities and the increasing role of information-intensive environments have created new challenges for firms in obtaining customer information. Such information can help firms increase their profits through cross-selling opportunities. However, revealing personal preferences and contact information can raise the risks for customers when dealing with a firm. Consequently, some customers trade off the benefit and risks of revealing information. As the opportunity to obtain a higher level of information increases, customers incur a higher level of risk when dealing with a firm. This increases the firm's incentive to commit on a cross-selling level. By such a commitment, a firm can obtain customer intimacy and benefit from detailed customer information. As a result, profits increase while prices decrease. Thus, legal regulations that explicitly require firms to spell out the extent of cross-selling may actually improve the profits of the firm.
---
paper_title: Price smarter on the Net.

paper_content:

Companies generally have set prices on the Internet in two ways. Many start-ups have offered untenably low prices in a rush to capture first-mover advantage. Many incumbents have simply charged the same prices on-line as they do off-line. Either way, companies are missing a big opportunity. The fundamental value of the Internet lies not in lowering prices or making them consistent but in optimizing them. After all, if it's easy for customers to compare prices on the Internet, it's also easy for companies to track customers' behavior and adjust prices accordingly. The Net lets companies optimize prices in three ways. First, it lets them set and announce prices with greater precision. Different prices can be tested easily, and customers' responses can be collected instantly. Companies can set the most profitable prices, and they can tap into previously hidden customer demand. Second, because it's so easy to change prices on the Internet, companies can adjust prices in response to even small fluctuations in market conditions, customer demand, or competitors' behavior. Third, companies can use the clickstream data and purchase histories that it collects through the Internet to segment customers quickly. Then it can offer segment-specific prices or promotions immediately. By taking full advantage of the unique possibilities afforded by the Internet to set prices with precision, adapt to changing circumstances quickly, and segment customers accurately, companies can get their pricing right. It's one of the ultimate drivers of e-business success.
---
paper_title: Dynamic pricing in internet retail: Effects on consumer trust

paper_content:

Individual-level price discrimination, while not a new idea, is more than a theoretical possibility in the Internet age. Economic theory argues that dynamic pricing (i.e., individual-level price discrimination) is inherently good for the profitability of the firm, because it allows the firm to capture a larger share of the consumer surplus, but anecdotal evidence from recent retail experiments with Internet-based dynamic pricing suggests that consumers react strongly against this practice. Using a two-dimensional conceptualization of trust, based on benevolence and competence trust, the current experiment examines how the experience of a dynamic pricing event and the direction of the pricing discrimination (i.e., whether one is offered the higher or the lower price) affects both the mean levels of trust and the weight given to the separate trust dimensions in the formation of overall trust. Because demand-based pricing, such as dynamic pricing, is generally considered unfair, it is expected that trust levels will be lower and that more weight will be given to benevolence trust. Results show that mean benevolence trust is significantly lower (which leads to a marginal decrease in overall trust) and the weight given to benevolence trust in the formation of overall trust substantially increases. The direction-of-price-discrimination effects are generally unsupported. © 2003 Wiley Periodicals, Inc.
---
paper_title: Analyzing the Simultaneous Use of Auctions and Posted Prices for Online Selling

paper_content:

Many firms in the business-to-consumer market sell identical products online using auctions and posted prices at the same time. In this paper, we develop and analyze a model of the key trade-offs sellers face in such a dual-channel setting built around the optimal choice of three design parameters: the posted price, the auction lot size, and the auction duration. Our results show how a monopolist seller can increase his revenues by offering auctions and a fixed price concurrently, and we identify when either a posted price only or a dual-channel strategy is optimal for the seller. We model consumer choice of channels, and thus market segmentation, and find a unique (symmetric) auction-participation equilibrium exists in which consumers who value the item for more than its posted price use a threshold policy to choose between the two channels. The threshold defines an upper bound on the remaining time of the auction. We explain how optimizing the design parameters enables the seller to segment the market so that the two channels reinforce each other and cannibalization is mitigated. Our findings also demonstrate that there are two dominant auction design strategies in this setting: one-unit auctions that tend to be short and long multiunit auctions. The optimal strategy for the seller depends on the consumer arrival rate and the disutility of delivery delay incurred by high-valuation consumers. In either case, the optimal design of the dual channel can significantly outperform a single posted-price channel. We show even greater benefits over a naive approach to managing the two channels that optimizes each independently. Our results suggest that unless firms jointly manage these online channels, they may find that adding auctions actually reduces their revenues.
---
paper_title: Customer Orientation in Advanced Planning Systems

paper_content:

Customer satisfaction is a major objective of Supply Chain Management. This also applies to “Advanced Planning Systems” (APS), computerized planning systems which try to support the various planning processes to be tackled in supply chains. “Order Promising” and “Demand Fulfillment” software modules of these systems are helpful in promising short and reliable customer order delivery dates and in tracking customer orders along the whole process between order entry and order delivery.
---
paper_title: Dynamic vehicle routing for online B2C delivery

paper_content:

Electronic commerce (EC) is increasingly popular in today's businesses. The business-to-consumer EC environment has voluminous, unpredictable, and dynamically changing customer orders. A major part of the delivery system of this environment is the dynamic vehicle routing (DVR) system. This study investigates several algorithms suitable for solving the DVR problem in business-to-consumer (B2C) EC environment. It designs the solution process into three phases: initial-routes formation, inter-routes improvement, and intra-route improvement. A computer program is created to demonstrate a system simulating vehicle routing process under the online B2C environment. The simulated system collects data for system performance indexes such as simulation time, travel distance, delivery time, and delay time. The results show that when orders are placed through the Internet in an online B2C environment, the Nearest algorithms can be used to find satisfactory routes during the first phase of a DVR delivery system. The three-phase solution process is proven to be significantly better in travel distance and delivery time than the conventional single-phase solution process.
---
paper_title: Data Mining for Inventory Item Selection with Cross-Selling Considerations

paper_content:

Association rule mining, studied for over ten years in the literature of data mining, aims to help enterprises with sophisticated decision making, but the resulting rules typically cannot be directly applied and require further processing. In this paper, we propose a method for actionable recommendations from itemset analysis and investigate an application of the concepts of association rules--maximal-profit item selection with cross-selling effect (MPIS). This problem is about choosing a subset of items which can give the maximal profit with the consideration of cross-selling effect. A simple approach to this problem is shown to be NP-hard. A new approach is proposed with consideration of the loss rule--a rule similar to the association rule--to model the cross-selling effect. We show that MPIS can be approximated by a quadratic programming problem. We also propose a greedy approach and a genetic algorithm to deal with this problem. Experiments are conducted, which show that our proposed approaches are highly effective and efficient.
---
paper_title: Coordinating Traditional and Internet Supply Chains

paper_content:

The Internet has provided traditional manufacturers and retailers a new avenue to conduct their business. On one hand, utilizing the Internet channel potentially could increase the market for the firm and, due to synergies involved, reduce the costs of operations. On the other hand, a new channel threatens existing channel relationships through possible cannibalization. This chapter explores recent research on coordination opportunities that arise for firms that participate in both traditional channels as well as internet channels. Three areas of coordination are discussed: procurement, pricing, and the backend operations of distribution and fulfillment.
---
paper_title: Cross-selling through database marketing : a mixed data factor analyzer for data augmentation and prediction

paper_content:

An important aspect of the new orientation on customer relationship marketing is the use of customer transaction databases for the cross-selling of new services and products. In this study, we propose a mixed data factor analyzer that combines information from a survey with data from the customer database on service usage and transaction volume, to make probabilistic predictions of ownership of services with the service provider and with competitors. This data-augmentation tool is more flexible in dealing with the type of data that are usually present in transaction databases. We test the proposed model using survey and transaction data from a large commercial bank. We assume four different types of distributions for the data: Bernoulli for binary service usage items, rank-order binomial for satisfaction rankings, Poisson for service usage frequency, and normal for transaction volumes. We estimate the model using simulated likelihood (SML). The graphical representation of the weights produced by the model provides managers with the opportunity to quickly identify cross-selling opportunities. We exemplify this and show the predictive validity of the model on a hold-out sample of customers, where survey data on service usage with competitors is lacking. We use Gini concentration coefficients to summarize power curves of prediction, which reveals that our model outperforms a competing latent trait model on the majority of service predictions.
---
paper_title: Incentive Schemes for Attended Home Delivery Services

paper_content:

Many companies with consumer direct service models, especially grocery delivery services, have found that home delivery poses an enormous logistical challenge because of the unpredictability of demand coupled with strict delivery windows and low profit margin products. In this paper, we examine the use of incentives to influence consumer behavior to reduce delivery costs. We propose optimization models for two forms of incentives and demonstrate their value and impact through simulation studies. We conclude with a presentation of insights resulting from our efforts.
---
paper_title: Dynamic pricing in the presence of inventory considerations: research overview, current practices, and future directions

paper_content:

The beneÞts of dynamic pricing methods have long been known in industries, such as airlines, hotels and electric utilities, where the capacity is Þxed in the short-term and perishable. In recent years, there has been an increasing adoption of dynamic pricing policies in retail and other industries as well, where the sellers have the ability to store inventory. Three factors contributed to this phenomenon: the increased availability of demand data, the ease of changing prices due to new techologies, and the availability of decision-support tools for analyzing demand data and for dynamic pricing. This paper constitutes a review of the literature and current practices in dynamic pricing. Given its applicability in most markets and its increasing adoption in practice, our focus is on dynamic (intertemporal) pricing in the presence of inventory considerations. (Dynamic Pricing; E-commerce; Revenue Management; Inventory)
---
paper_title: Auctions, Bidding and Exchange Design

paper_content:

Auctions have found widespread use in the last few years as a technique for supporting and automating negotiations on the Internet. For example, eBay now serves as a new selling channel for individuals, and small and big enterprises. Another use for auctions is for industrial procurement. In both these settings traditional auction mechanisms such as the English, Dutch, First (or Second) price Sealed-Bid auctions are now commonplace. These auctions types are useful for settings where there is a single unit of an item being bought/sold. However, since procurement problems are business-to-business they tend to be more complex and have led to the development and application of advanced auction types that allow for negotiations over multiple units of multiple items, and the configuration of the attributes of items. At the heart of auctions is the problem of decentralized resource allocation.
---
paper_title: COORDINATION OF PRICING AND INVENTORY DECISIONS: A SURVEY AND CLASSIFICATION

paper_content:

Recent years have seen scores of retail and manufacturing companies exploring innovative pricing strategies in an effort to improve their operations and ultimately the bottom line. Firms are employing such varied tools as dynamic pricing over time, target pricing to different classes of customers, or pricing to learn about customer demand. The benefits can be significant, including not only potential increases in profit, but also improvements such as reduction in demand or production variability, resulting in more efficient supply chains.
---
paper_title: Dynamic Vehicle Routing Based on Online Traffic Information

paper_content:

With the increasing availability of real-time information and communication systems in logistics, the need for appropriate planning algorithms, which make use of this technology, arises. Customers in transport markets increasingly expect quicker and more flexible fulfillment of their orders, especially in the electronic marketplace. This paper considers a dynamic routing system that dispatches a fleet of vehicles according to customer orders arriving at random during the planning period. Each customer order requires a transport from a pickup location to a delivery location in a given time window. The system disposes of online communication with all drivers and customers and, in addition, disposes of online information on travel times from a traffic management center. This paper presents a planning framework for this situation which, to our knowledge, has not yet been addressed in the literature. It then describes three routing procedures for event-based dispatching, which differ in the length of the planning horizon per event. We focus on the use of dynamic travel time information, which requires dynamic shortest path calculations. The procedures are tested and compared using real-life data of an urban traffic management center and a logistics service provider.
---
paper_title: The vehicle routing problem

paper_content:

The Vehicle Routing Problem covers both exact and heuristic methods developed for the VRP and some of its main variants, emphasizing the practical issues common to VRP. The book is composed of three parts containing contributions from well-known experts. The first part covers basic VRP, known more commonly as capacitated VRP. The second part covers three main variants of VRP with time windows, backhauls, and pickup and delivery. The third part covers issues arising in real-world VRP applications and includes both case studies and references to software packages. The book will be of interest to both researchers and graduate-level students in the communities of operations research and matematical sciences. It focuses on a specific family of problems while offering a complete overview of the effective use of the most important techniques proposed for the solution of hard combinatorial problems. Practitioners will find this book particularly usef
---
paper_title: An Empirical Examination of the Decision to Invest in Fulfillment Capabilities: A Study of Internet Retailers

paper_content:

Internet technology has allowed for a higher degree of decoupling between the information-intensive sales process and the physical process of inventory management than its brick-and-mortar counterpart. As a result, some Internet retailers choose to outsource inventory and back-end operations to focus on the sales/marketing aspects of e-commerce. Nonetheless, many retailers keep fulfillment capabilities in-house. In this paper, we identify and empirically test factors that persuade firms to integrate inventory and fulfillment capabilities with virtual storefronts. Based on the extant literature and previous research in e-commerce, we formulate nine theoretical predictions. We then use data from a sample of over 50 public Internet retailers to test whether empirical data are consistent with these hypotheses. Finally, given the strategic importance and financial magnitude of the inventory investment decision, we analyze the effect of this decision on the economic success of Internet retailers during the period of study. We find that there are many circumstances in which it is prudent to own fulfillment capabilities and inventory. Empirical data are consistent with hypotheses that this tendency is higher for older firms selling small, high-margin products, offering lower levels of product variety, and facing lower demand uncertainty. We also discover that firms making inventory ownership decisions that are consistent with an empirical benchmark derived from environmental and strategic factors are less likely to go bankrupt than those making inconsistent inventory choices.
---
paper_title: Internet Book Retailing and Supply Chain Management: An Analytical Study of Inventory Location Speculation and Postponement

paper_content:

Internet retailing models support supply chains where consumer order locations are decoupled from inventory locations. In this setting, retailers dynamically consider inventory location speculation and postponement to fulfill their orders. Particularly, retailers can manage inventory to fulfill orders through two opposing strategies: in-stock inventory and drop-shipping. This paper extends the supply chain management literature by modeling Internet retailers' decisions to balance their offerings between these two strategies. The results show how retailers depend more on both of these strategies as their market share and product popularity increase. Thus, both inventory management strategies may be considered simultaneously to better manage Internet retailers' inventory.
---
paper_title: Performance Analysis of Split-Case Sorting Systems

paper_content:

Split-case sorting systems are used in many retail supply chains where items must be distributed in less-than-case quantities, such as orders shipped directly to customers by catalogers and e-tailers or shipments made in less-than-case quantities from a distribution center to a retail store. These systems are particularly effective in order-packing systems where the same item is needed for multiple orders. Items are inducted into a circular sorting conveyor system one unit at a time and then delivered to an order-packing bin designated for a particular customer or retail store. We develop analytical performance models that incorporate the stochastic operating conditions faced by these systems. Our model allows system designers to predict the sorting capacity for different system configurations. More importantly, we use the model to develop insight into the system design and operation.
---
paper_title: Dynamic Pricing Through Discounts for Optimizing Multiple-Class Demand Fulfillment

paper_content:

In a multiple-customer-class model of demand fulfillment for a single item, we consider the use of dynamic price discounts to encourage backlogging of demand for customer classes denied immediate service. Customers are assumed to arrive over several stages in a period, and customer classes are distinguished by their contractual price and sensitivity to discounts. Through dynamic programming we determine the optimal discounts to offer, assuming a linear model for the sensitivity of customers to such inducements. We show that customers are served in class order, and allocation of inventory to demand is determined by considering the current number of customers backlogged, as well as the current inventory position. Through comparison to a naive supplier allocating inventory first come/first served with no discounting, we show that profits are primarily influenced by the allocation of capacity, and the use of price discounts primarily benefits the second-class customers overall fill rate. Heuristics for implementation of the solution in real-time settings are given.
---
paper_title: The distribution-free newsboy problem with resalable returns

paper_content:

We study the case of a catalogue/internet mail order retailer selling seasonal products and receiving large numbers of commercial returns. Returned products arriving before the end of the selling season can be resold if there is sufficient demand. A single order is placed before the season starts. Excess inventory at the end of the season is salvaged and all demands not met directly are lost. Since little historical information is available, it is impossible to determine the shape of the distribution of demand. Therefore, we analyze the distribution-free newsboy problem with returns, in which only the mean and variance of demand are assumed to be known. We derive a simple closed-form expression for the distribution-free order quantity, which we compare to the optimal order quantities when gross demand is assumed to be normal, lognormal or uniform. We find that the distribution-free order rule performs well in most realistic cases.
---
paper_title: The newsboy problem with resalable returns: A single period model and case study

paper_content:

We analyze a newsboy problem with resalable returns. A single order is placed before the selling season starts. Purchased products may be returned by the customer for a full refund within a certain time interval. Returned products are resalable, provided they arrive back before the end of the season and are undamaged. Products remaining at the end of the season are salvaged. All demands not met directly are lost. We derive a simple closed-form equation that determines the optimal order quantity given the demand distribution, the probability that a sold product is returned, and all relevant revenues and costs. We illustrate its use with real data from a large catalogue/internet mail order retailer.
---
paper_title: Return handling options and order quantities for single period products

paper_content:

Products which are sold through E-commerce or mail sales catalogues tend to have a much higher return rate than traditional products. The returns are especially problematic for seasonal products. To support decision making in these situations we study various options, which may be considered as strategic decisions, on handling the increased return flow. Closed form analytic expressions for optimal order quantities are obtained by solving the models developed for each option. Decision making guidelines on choosing between return options and some properties of the optimal solutions are presented. We also discuss estimation of the serviceable return rate in practical situations.
---
paper_title: INVENTORY RATIONING AND SHIPMENT FLEXIBILITY ALTERNATIVES FOR DIRECT MARKET FIRMS

paper_content:

This paper investigates inventory-rationing policies of interest to firms operating in a direct market channel. We model a single product with two demand classes, where one class requests a lower order fulfillment lead time but pays a higher price. Demand for each class follows a Poisson process. Inventory is fed by a production system with exponentially distributed build times. We study rationing policies in which the firm either blocks or backlogs orders for the lower priority customers when inventory drops below a certain level. We compare the performance of these rationing policies with a pure first-come, first-serve policy under various scenarios for customer response to delay: lost sales, backlog, and a combination of lost sales and backlog.
---
paper_title: Inventory rationing via drop-shipping in Internet retailing: A sensitivity analysis

paper_content:

Abstract In this paper, we study a threshold level inventory rationing policy that is of interest to e-tailers, operating in a business to consumer (B2C) environment and selling non-perishable, made-to-stock items such as books, CDs, consumer electronics, and body and bath products. A Monte Carlo simulation model is developed to examine this policy when the demand process is stochastic, lead-time is stochastic, and the e-tailer uses ‘drop-shipping’ as an order fulfillment option. The methodology presented, which includes computer simulation and a full factorial experimental design, permits understanding of the complexity of the decision-making environment and implications of different sources of uncertainty (e.g. demand variability and lead-time variability) on a profit-maximizing threshold level of inventory, a stock level below which low margin orders are drop-shipped directly from the e-tailer’s supplier rather than fulfilled from internal stock.
---
paper_title: Internet Book Retailing and Supply Chain Management: An Analytical Study of Inventory Location Speculation and Postponement

paper_content:

Internet retailing models support supply chains where consumer order locations are decoupled from inventory locations. In this setting, retailers dynamically consider inventory location speculation and postponement to fulfill their orders. Particularly, retailers can manage inventory to fulfill orders through two opposing strategies: in-stock inventory and drop-shipping. This paper extends the supply chain management literature by modeling Internet retailers' decisions to balance their offerings between these two strategies. The results show how retailers depend more on both of these strategies as their market share and product popularity increase. Thus, both inventory management strategies may be considered simultaneously to better manage Internet retailers' inventory.
---
paper_title: An overview of inventory systems with several demand classes

paper_content:

In this chapter we discuss inventory systems where several demand classes may be distinguished. In particular, we focus on single-location inventory systems and we analyse the use of a so-called critical level policy. With this policy some inventory is reserved for high-priority demand. A number of practical examples where several demand classes naturally arise are presented, and the implications and modelling of the critical level policy in distribution systems are discussed. Finally, an overview of the literature on inventory systems with several demand classes is given.
---
paper_title: Reverse logistics : quantitative models for closed-loop supply chains

paper_content:

1 A Framework for Reverse Logistics.- 2 Quantitative Models for Reverse Logistics Decision Making.- 3 Managing Product Returns: The Role of Forecasting.- 4 Reverse Logistics Network Design.- 5 Collection and Vehicle Routing Issues in Reverse Logistics.- 6 Product Returns: Handling and Warehousing Issues.- 7 Lot Sizing Decisions in Product Recovery Management.- 8 Stochastic Inventory Control for Product Recovery.- 9 Managing Dynamic Product Recovery.- 10 Production Planning for Product Recovery Management.- 11 Valuation of Inventories in Product Recovery Systems.- 12 Coordination in Closed-Loop Supply Chains.- 13 Long-term Analysis of Closed-loop Supply Chains.- 14 LCA for Evaluating End-of-life Options of Spent Products.- 15 Models for Eco-eco Closed-loop Supply Chain Optimization.- 16 ICT Enabling Reverse Logistics.- Append.- Notation.- References.
---
paper_title: A genetic algorithm approach to developing the multi-echelon reverse logistics network for product returns

paper_content:

Traditionally, product returns have been viewed as an unavoidable cost of doing business, forfeiting any chance of cost savings. As cost pressures continue to mount in this era of economic downturns, a growing number of firms have begun to explore the possibility of managing product returns in a more cost-efficient manner. However, few studies have addressed the problem of determining the number and location of centralized return centers (i.e., reverse consolidation points) where returned products from retailers or end-customers were collected, sorted, and consolidated into a large shipment destined for manufacturers' or distributors' repair facilities. To fill the void in such a line of research, this paper proposes a nonlinear mixed-integer programming model and a genetic algorithm that can solve the reverse logistics problem involving product returns. The usefulness of the proposed model and algorithm was validated by its application to an illustrative example dealing with products returned from online sales.
---
paper_title: Facility location models for distribution system design

paper_content:

The design of the distribution system is a strategic issue for almost every company. The problem of locating facilities and allocating customers covers the core topics of distribution system design. Model formulations and solution algorithms which address the issue vary widely in terms of fundamental assumptions, mathematical complexity and computational performance. This paper reviews some of the contributions to the current state-of-the-art. In particular, continuous location models, network location models, mixed-integer programming models, and applications are summarized.
---
paper_title: Supply Chain Choice on the Internet

paper_content:

Internet companies extensively use the practice of drop-shipping, where the wholesaler stocks and owns the inventory and ships products directly to customers at retailers request. Under the drop-shipping arrangement, the supply chain benefits from risk pooling because the inventory for multiple retailers is stocked at the same location, the wholesalers. Another more traditional channel alternative on the Internet is one in which retailers stock and own the inventory. These two supply chain structures, which predominate on the Internet, result in different inventory risk allocation, stocking decisions, and profits for channel members. Moreover, the two channel alternatives can be combined into a dual strategy whereby the retailer uses local inventory as a primary source and relies on drop-shipping as a backup. We model the dual strategy as a noncooperative game among the retailers and the wholesaler, analyze it, and obtain insights into the structural properties of the equilibrium solution to facilitate development of recommendations for practicing managers. Finally, we characterize situations in which each of three channels is preferable by specifying appropriate ranges of critical parameters, including demand variability, the number of retailers in the channel, wholesale prices, and transportation costs.
---
paper_title: Decision Support for Consumer Direct Grocery Initiatives

paper_content:

Many companies with consumer direct service models, especially grocery delivery services, have found that home delivery poses an enormous logistical challenge due to the unpredictability of demand coupled with strict delivery windows and low profit margin products. These systems have proven difficult to manage effectively and could benefit from new technology, particularly to manage the interaction between order capture and order delivery. In this article, we define routing and scheduling problems that incorporate important features of this emerging business model and propose algorithms, based on insertion heuristics, for their solution. In the proposed home delivery problem, the company decides which deliveries to accept or reject as well as the time slot for the accepted deliveries so as to maximize expected profits. Computational experiments reveal the importance of an approach that integrates order capture with order delivery and demonstrates the quality and value of the proposed algorithms.
---

Title: E-fulfillment and Multi-Channel Distribution - A Review
Section 1: Introduction
Description 1: Introduce the topic of Internet sales growth, the rise of multi-channel retailing, and the importance of understanding e-fulfillment in this context.

Section 2: Scope & Framework
Description 2: Define the scope of the analysis, position it within the existing literature, and outline the framework used to structure the discussion.

Section 3: Issues
Description 3: Discuss the major supply chain planning tasks in e-fulfillment, including sales-related planning, delivery service design, pricing and forecasting, order promising, revenue management, and transportation planning.

Section 4: Models
Description 4: Review quantitative decision support models from the academic literature that correspond with the identified e-fulfillment planning issues.

Section 5: Conclusions
Description 5: Summarize the main observations of the paper, highlight areas of need for future research, and emphasize the integration of supply and demand management in e-fulfillment.