Abstract: Omni-channel retailing, the combination of online and traditional store channels, has led to the use of traditional stores as fulfillment centers for online orders. A key aspect of omni-channel fulfillment problems is the tradeoff between cancellations of accepted online orders and profits: a riskier fulfillment policy may result in more online sales but also more cancelled orders.
In this talk, I will describe a stochastic model of the process leading to order cancellations for a single item so that retailers may find fulfillment policies that effectively use this information along with shipping costs between various locations. We describe iterative algorithms based on Infinitesimal Perturbation Analysis (IPA) that converge to optimal and locally optimal policies within certain flexible policy classes for the multiple-location version of this model, and show their empirical performance on simulations based on real data from a high-end North American retailer. Time permitting, I will sketch extensions of the basic model to account for multiple stages of fulfillment and modeling pick failures at stores.
This talk is based on the dissertation of Jeremy Karp at CMU describing work carried out jointly with Prof. Sridhar Tayur (CMU) and Dr. Srinath Sridhar (Onera Inc), with recent contributions from Su Jia and Sagnik Das from CMU.
Dr. R. Ravi is Andris A. Zoltners Professor of Business, and Professor of
Operations Research and Computer Science at Carnegie Mellon University.
Ravi received his bachelor's degree from IIT, Madras, and Master's and doctoral
degrees from Brown University, all in Computer Science.
Ravi's research focuses on models, methods and applications of discrete
optimization, and their applications in the intersection of business and technology.
He served as area editor for "Operations Research" in charge of the discrete
optimization area between 2012-2017. He has formerly served as associate editor
in the ACM Transactions on Algorithms, Management Science, Networks and
Journal of Algorithms. He has also served on several international program
committees including as the program chair for the 2008 IEEE Foundations of
Computer Science (FOCS) conference. Ravi has co-authored two books, over 130
publications, and has a h-index of over 50.
Ravi has been at the Tepper School of Business since 1995 where he served as the
Associate Dean for Intellectual Strategy from 2005-2008. He was Chair of the
Future Educational Delivery Committee that launched the online hybrid Tepper
MBA in 2013. He was elected a Fellow of the INFORMS in 2017.