Making Better Fulfillment Decisions on the Fly in an Online Retail Environment
We partner with an e-tailer to examine how best to fulfill each customer’s order when customers have different service requirements and shipping costs. We report on the development of a heuristic that makes real-time fulfillment decisions by minimizing outbound cost plus an estimate of expected future costs. These estimates are derived from the dual values of a transportation problem. In our experiments, our heuristic shows a reduction of 0.5% in total outbound shipping costs.
