Batch Order and Discrete Order Picking Integrated with Vehicle Routing Decisions

Abstract

In a business-to-consumer (B2C) context, customers order more frequently and in smaller quantities, resulting in a high number of consignments. Moreover, online shoppers expect a fast and accurate delivery at low cost or even free. To survive in such a market, companies can no longer optimise individual supply chain processes, but need to integrate several activities. In this article, the integrated order picking-vehicle routing problem is analysed in an e-commerce environment. In previous research, a mathematical programming formulation has been formulated in literature but only small-size instances can be solved to optimality. Two picking policies are studied: discrete order picking and batch order picking. The influence of various problem contexts on the value of integration is investigated: a small picking time period, outsourcing to 3PL service providers, and a dynamic environment context.