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SD9 - RL3: Value of logistics in retail operations
Time:
Sunday, 25/June/2023:
SD 14:45-16:15
Location:Cartier I
3rd floor
Presentations
Customer satisfaction and differentiated pricing in e-retail delivery
Dipayan Banerjee, Alan Erera, Alejandro Toriello
Georgia Institute of Technology, United States of America
We study tactical decision-making for a last-mile e-retail system in which same-day delivery (SDD) and next-day delivery (NDD) orders are fulfilled by the same fleet. We build a continuous approximation model of the system. Unlike prior work using similar methods, we explicitly consider customers' price sensitivity and the relationship between consecutive days in the system. Using this model, we analyze a customer satisfaction objective, then maximize revenue via a differentiated pricing scheme.
Impact of delivery radius on the profitability of ultrafast grocery retailers
Navid Mohamadi1, Zumbul Atan1, Sandra Transchel2, Jan C. Fransoo3
1Eindhoven University of Technology, Netherlands; 2Kuehne Logistics University, Germany; 3Tilburg University, Netherlands
Ultrafast grocery deliveries are struggling to become economically sustainable. One way to do so is to optimize the committed delivery time. We show that the optimal delivery radius might be different for different locations. Our results highlight while retailers commit to an identical delivery time, this policy harms their economic sustainability. Our study provides an extensive understanding of the influential factors on profitability and identifies the bottlenecks to improve operations.
The value of logistic flexibility in e-commerce
Bing Bai1, Tat Chan1, Dennis Zhang1, Fuqiang Zhang1, Yujie Chen2, Haoyuan Hu2
1Washington University in St. Louis; 2Alibaba Group
E-commerce focuses on improving shipping experience. Pick-up stations boost sales by 3.9%, driven by logistic flexibility, not shipping speed. Consumer choice model shows value in time (76.2%) and choice (23.8%) flexibility. Fewer pick-up stations achieve sales lift. A new strategy without pick-up stations improves sales by 8.4%. Counterfactual logistic strategies increase consumer welfare by 2.0%-10.0%.
