Name
Abstract | ||
|---|---|---|
AbstractOmnichannel distribution, which blends brick-and-mortar retailing and e-commerce, is a key challenge for today’s supply chains. In this paper, we report on a study to design an omnichannel distribution system for Total Hockey, a growing U.S. sporting goods retailer in a competitive environment. Management strongly believes that e-commerce success will depend on high service levels characterized by one- or two-day delivery and initially thought that a new omnichannel warehouse located on the East Coast could support its expansion plans. To study the situation, we developed a profit-maximizing optimization model for locating omnichannel warehouses that supports both e-commerce and store shipments. The model uses estimates of e-commerce demand by metropolitan statistical area (MSA) across the United States, while incorporating management’s sales expectations regarding the value of high service levels, e-commerce sales lost to competitors’ stores, and reverse cannibalism from Total Hockey’s own retail stores. Multiple warehouse sizes allow modeling of nonlinear inventory costs. The facility-location optimization model allows exploration of multiple solutions and an assessment of the impact of higher service levels. The results of the study were contrary to management expectations and suggested a significant redesign of the distribution system. We report results for several analyses, implementation details, and managerial insights for omnichannel distribution. |
Year | DOI | Venue |
|---|---|---|
2018 | 10.1287/inte.2018.0942 | Periodicals |
Keywords | Field | DocType |
omnichannel, e-commerce, facility-location modeling, integer programming, linear programming, OR/MS implementation: applications | Industrial engineering,Integer programming,Omnichannel,Supply chain,Linear programming,Engineering,Operations management,E-commerce | Journal |
Volume | Issue | ISSN |
48 | 4 | 0092-2102 |
Citations | PageRank | References |
0 | 0.34 | 0 |
Authors | ||
2 | ||
Name | Order | Citations | PageRank |
|---|---|---|---|
| Mitchell A. Millstein | 1 | 0 | 0.34 |
| James F. Campbell | 2 | 3 | 1.39 |