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Optimizing warehouse inventory levels for online order fulfillment

Published on:

7 March 2024

Primary Category:

Data Structures and Algorithms

Paper Authors:

Boris Epstein,

Will Ma

Bullets

Key Details

Studies inventory placement for e-commerce order fulfillment

Provides $(1-(1-1/d)^d)/2$ approximation guarantee for Offline optimization

Uses randomized rounding to optimize Offline surrogate

Experiments show Offline optimization robustly outperforms others

AI generated summary

Optimizing warehouse inventory levels for online order fulfillment

This paper studies the problem faced by e-commerce companies of determining inventory levels across warehouses, before facing a stream of customer orders to fulfill. It compares three methods: Offline optimization, Myopic simulation, and Fluid approximation. Theoretically, Offline optimization is shown to achieve a $(1-(1-1/d)^d)/2$ approximation guarantee, using randomized rounding techniques. Experiments on JD.com data find Offline optimization to perform best when paired with a high-quality fulfillment policy.

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