2011
HMS 2011 Proceeding
Logistic Model for the Distribution of Goods in the E-Grocery Industry: a New Adaptation of the Vehicle Routing Problem
Authors: Beatriz García Jiménez, Fernando Gómez González
Abstract
The increasing use of internet and the growing penetration of e-commerce in households have brought the need to redefine the business models and supply chains to achieve profitability in a sector in which logistics costs rises to 10-15%. The grocery industry is considered pioneer in home delivery service. Nevertheless, e-grocers haven?t been still able to find the model of success that ensures profitability to their businesses. This paper deals with the problem of distribution of goods in the grocery retail industry associated with e- commerce. The problem has three main components that make the cost optimization difficult the decisions about order filling (whether the picking should be made in stores closest to customers or in warehouses, and the definition of the level of automation in picking in warehouses), as well as the Vehicle Routing Problem with Time Windows, referred to as VRPTW. The paper examines the solutions being adopted by companies in this sector, identifying best practices, deciding on the variables on which to act and making a proposal for the mathematical model to describe the problem.
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