The effect of optimizing warehouse locations on omnichannel designs

dc.authorscopusid55971786600
dc.authorscopusid11440693100
dc.authorscopusid25123472800
dc.contributor.authorMillstein, Mitchel A.
dc.contributor.authorBilir, Canser
dc.contributor.authorCampbell, James F.
dc.date.accessioned2022-03-04T19:12:34Z
dc.date.available2022-03-04T19:12:34Z
dc.date.issued2022
dc.departmentMühendislik ve Doğa Bilimleri Fakültesi
dc.description.abstractOmnichannel distribution integrates stores and warehouses to fulfill online and store demand. This research studies the performance of four channel designs: (i) ship-from-store, (ii) ship-from-warehouse, (iii) ship-from-store-and-warehouse, and (iv) ship-from-warehouse with backhauling from the store inventory to the warehouse. Our focus is on omnichannel retailers who carry a single product category. A profit maximizing mixed integer linear programming model (MILP) is presented to determine the optimal locations and capacities of omnichannel warehouses, and the product flows from suppliers to warehouses, warehouses to the stores, and warehouses and stores to online markets. The online demand earned by the firm in each market is determined endogenously in the model as a function of the shipping time (distance) and the level of competition in the online market. Different warehouse capacities capture economies-of-scale in operating costs. To cover a wide range of different products, computational results are presented for five product categories, each considered separately, with widely differing cost characteristics. Results show that the ship-from-warehouse design generates greater profit than ship-from store for four product categories. However, the ship-from-store-and-warehouse design is better than both of the more restrictive ship-from-store or ship-from-warehouse designs, with the advantage growing as the percentage of online demand increases. Results also document increasing benefits from optimizing the number, locations and capacities of omnichannel warehouses as the demand increases. The magnitude of the profit advantage of different omnichannel designs is shown to depend strongly on the product category and percentage of demand that is online. © 2021 Elsevier B.V.
dc.description.sponsorshipThe authors would like to thank the anonymous reviewers whose suggestions greatly improved the clarity and contributions of this paper.
dc.identifier.doi10.1016/j.ejor.2021.10.061
dc.identifier.issn0377-2217
dc.identifier.orcidCanser Bilir |0000-0002-3615-5819
dc.identifier.scopus2-s2.0-85119930505
dc.identifier.scopusqualityQ1
dc.identifier.urihttps://doi.org/10.1016/j.ejor.2021.10.061
dc.identifier.urihttps://hdl.handle.net/20.500.12436/3242
dc.indekslendigikaynakScopus
dc.institutionauthorBilir, Canser
dc.language.isoen
dc.publisherElsevier B.V.
dc.relation.ispartofEuropean Journal of Operational Research
dc.relation.publicationcategoryMakale - Uluslararası Hakemli Dergi - Kurum Öğretim Elemanı
dc.rightsinfo:eu-repo/semantics/closedAccess
dc.subjectE-commerce supply chain
dc.subjectFacility location optimization
dc.subjectNetwork optimization
dc.subjectOmnichannel
dc.subjectElectronic commerce
dc.subjectInteger programming
dc.subjectLocation
dc.subjectOperating costs
dc.subjectProduct design
dc.subjectProfitability
dc.subjectShips
dc.subjectWarehouses
dc.subjectE-commerce supply chain
dc.subjectFacilities locations
dc.subjectFacility location optimization
dc.subjectLocation optimization
dc.subjectNetwork optimization
dc.subjectOmnichannel
dc.subjectOnline markets
dc.subjectProduct categories
dc.subjectWarehouse design
dc.subjectWarehouse location
dc.subjectSupply chains
dc.titleThe effect of optimizing warehouse locations on omnichannel designs
dc.typeArticle
dspace.entity.typePublication

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