An optimization framework for a multi-objective omni-channel order fulfilment problem

Abstract

With ever-increasing online sales volumes, retailers seize the opportunity to utilize their stores as online order fulfilment centers. This practice brings out a new optimization problem with multiple conflicting business objectives including shipping cost and order delay minimization, carrier upgrade avoidance, and load balancing across the store network to avoid future upgrades and delays. With these objectives in consideration, we put forward a multipleobjective optimization problem that assigns items in an order to stores in the network and selects the most economical carrier option for the packages at stores. We provide experimental results running the model with real data including carrier availability and modes at stores, billable weights for items using carrier dimensional factors, detailed shipping cost structure for carriers based on step-size package weights, and shipment zone and transit days data.