A Study on Optimization of Picking Facilitiesfor e-Commerce Order Fulfillment

TaeHyun Kim, SangHwa Song

Abstract


The number of domestic e-commerce transactions has been breaking its own record by an annual average growth rate of over 20% based on volume for the past 5 years. Due to the rapid increase in e-commerce market, retail companies that have difficulty meeting consumers in person are in fierce competition to take the lead in the last mile service, which is the only point of contact with customers. Especially in the delivery area, where competition is most intense, the role of the fulfillment center is very important for service differentiation. It must be capable of fast product preparation ordered by consumers in accordance with the delivery service level. This study focuses on the order picking system for rapid order processing in the fulfillment center as an alternative for companies to gain competitive advantage in the e-commerce market. A mixed integer programming model was developed and implemented to optimize the stock replenishment in order picking facilities. The effectiveness was scientifically and objectively verified by simulation using the actual operation process and data.


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References


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