A method for generating fixed feasible ordering and delivery schedules for grocery retailers

Abstract

A distribution network is the pathway that all products and services go through before reaching the end consumer. It consists of interdependent institutions which perform tasks such as inventory carrying, generation of demand and physical distribution. The physical distribution has direct impact on both supply chain costs and customer service and is therefore a key driver when it comes to overall profitability of a firm. The design and management of a distribution network is crucial for companies in order to maintain competitive advantages.
Grocery retailers often have complex distribution networks with many distribution centres and different temperature requirements depending on the goods. The format of the stores varies as well in terms of size, range of products and sales volume. Therefore, the way grocery retailers operate, their retail structure, distribution standards and service requirements differ greatly. Making a choice about appropriate ordering and delivery schemes for grocery retailers is not an easy task. Many factors should be considered such as shelf life of products, their sales patterns and their limited shelf space. Moreover, all possible distribution contributions should be considered. This is, however, not considered to full extent in the literature on the subject so far.