Allocating Product Assortment to Distribution Centers to Minimize Split Customer Orders

Monday, March 4, 2013 ( 2:00 pm to 3:00 pm )

Location: BC 204

Howe School Talk

Andrés Catalán, Ph.D. candidate, The Wharton School



A split order in retail occurs whenever an order is fulfilled in more than one shipment. This entails additional costs to the retailer. In the context of electronic commerce retail, we study the problem of assigning stock-keeping units to distribution centers (DCs) to minimize split orders. Given that the problem is NP-hard, we will discuss several heuristics that leverage actual transaction basket data from a Chinese online retailer, and we will compare them to other benchmark algorithms that do not take into account such data. We will evaluate the results of the test along three dimensions: the average number of shipments per order, workload balance across the DCs, and the number of DCs that are capable of fulfilling a particular order.



Andrés Catalán is a doctoral candidate in the Operations and Information Management department at the Wharton School of the University of Pennsylvania. Andrés graduated as valedictorian, summa cum laude from Universitat Pompeu Fabra in 2003 with a BA in Business Management and Administration, and was awarded a MSc with Honors in Management at the same institution in 2007. Prior to joining Wharton, Andrés also worked as international tax analyst for the largest provider of professional legal services in Spain and served five years as officer of the world's largest student-run non-governmental organization. His research focuses on using customer data to better match supply and demand by informing organizational process in the domains of fulfillment and customer acquisition.