The Benefits of Re-evaluating Real Time Fulfillment Decisions
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Date: 11-28-2006
Start Time:
1:00pm
End Time: 2:00pm
Speaker: Steve Graves, MIT
Location: Mudd 303
Abstract
When a customer orders online, an e-tailer assigns the order to one or more of its warehouses and/or drop-shippers, so as to minimize procurement and transportation costs, based on the available current information. However, this assignment is necessarily myopic as it cannot account for any subsequent customer orders or future inventory replenishments. We examine the benefits from periodically re-evaluating these real-time assignments. We construct near-optimal heuristics for the re-assignment for a large set of customer orders by minimizing the total number of shipments. Finally, we present evidence of significant saving opportunities by testing the heuristics on order data from a major e-tailer.
Joint work with Russell Allgor and Ping Xu.
Bio
Steve Graves is the Abraham J. Siegel Professor of Management Science and a professor of mechanical engineering and engineering systems.
Dr. Graves received his Ph.D. in Operations Research from the University of Rochester. He is interested in the development and application of operations research models and methods to solve problems in manufacturing systems, supply chains, and service operations. Current projects include strategic inventory positioning in a supply chain and optimizing the design and configuration of an order fulfillment center.
Dr. Graves was the chair of the MIT faculty from 2001 to 2003. He has also served as deputy dean of MIT Sloan School of Management from 1990 to 1993 and codirector of the MIT Leaders for Manufacturing Program from 1989 to 1990 and 1994 to 2001. He is a faculty affiliate of the MIT Operations Research Center and the Singapore-MIT alliance.Dr. Graves has consulted extensively to industry and served in editorial capacities on several professional and academic journals. He is an INFORMS fellow and MSOM fellow.