Abstract
Omni-channel retailing has grown exponentially since the onset of the COVID-19pandemic and the associated increase in demand for fully online and buy-online-pickup-in-store(BOPIS) shopping options. As part of the evolution of demand fulfillment, retailers mustreassess their fulfillment strategies with a focus on maintaining or improving customer service(in the form of product availability, shortened order fulfillment cycle times, and order accuracy)while maintaining or reducing inventory and order fulfillment costs (which incorporate orderpick, packaging, and delivery costs). Achieving these objectives may include store fulfillmentin addition to direct fulfillment from distribution facilities. The purpose of this research is toevaluate inventory allocation decisions in a retail dual-channel order fulfillment process,incorporating store fulfillment, for the purpose of minimizing order fulfillment costs and orderfulfillment cycle time. A case approach, combined with discrete-event simulation modeling, isused to determine optimal inventory levels at both facilities. Strategic decision points are alsoassessed to maximize customer service within the bounds of cost constraints. Opportunities forfurther order fulfillment improvements are also discussed.
Recommended Citation
Lovelace, Cynthia R.
(2023)
"Allocation in Dual-Channel Retailing using Simulation: Fulfillment Cost and Cycle Time Considerations,"
Journal of Business, Industry, and Economics: Vol. 28, Article 2.
Available at:
https://roar.una.edu/jobie/vol28/iss1/2