Store and warehouse based e-grocery fulfillment

Abstract

The wide-spread adoption of e-groceries leads to an increased need to optimize the order handling process. After ordering, the requested items must be collected. The items can be picked in either a grocery store or a dedicated warehouse. Once the order picking process has been completed, the items are delivered to the customer. So far, picking and delivery of items are investigated separately. In this work, we study the integrated picking and delivery problem of e-fulfillment. We optimize the order picking and vehicle routing operations to fulfill all orders as efficiently as possible. In the experiments, we study which order characteristics determine the preferred fulfillment location. Both fulfillment locations have their own advantages and disadvantages. Stores are designed with a marketing perspective in mind, not for efficient picking. This results in relatively long picking routes to collect all items. Yet, stores are usually situated in crowded areas, close to the customers. This allows for efficient delivery routes. On the other hand, orders can also be picked in a dedicated warehouse. In warehouses, items can be assigned to storage locations with efficient picking operations in mind, reducing the required travel distance to collect the items. Warehouses are usually not situated in the center of the city, however, but rather in the city’s outskirts. This has an impact on the delivery to the customers, as, on average, the travel distance from the delivery operations is rather large.