Online Demand Fulfillment Under Limited Flexibility

36 Pages Posted: 14 Jul 2018

See all articles by Zhen Xu

Zhen Xu

Columbia University, Department of Industrial Engineering and Operations Research (IEOR), Students

Hailun Zhang

CUHK, Shenzhen

Jiheng Zhang

HKUST

Rachel Zhang

Hong Kong University of Science & Technology (HKUST)

Date Written: June 23, 2018

Abstract

We study online demand fulfillment in sparse networks with arbitrary numbers of resources and request types, and positive Generalized Capacity Gaps (GCG) introduced by Shi et al.(2016). We show that such a sparse network with limited flexibility is both necessary and sufficient to achieve bounded performance gap compared with networks with full flexibility, extending the work by Asadpour et al. (2016) from the long chains to more general sparse networks. We develop simple inventory allocation rules and guidelines for designing sparse network structures with positive GCGs such as generalized long chains. Numerical experiments and a real case study are conducted to confirm our findings as well as some of the flexibility principals conjectured in the literature.

Keywords: process flexibility, online retailing, dynamic resource allocation

Suggested Citation

Xu, Zhen and Zhang, Hailun and Zhang, Jiheng and Zhang, Rachel, Online Demand Fulfillment Under Limited Flexibility (June 23, 2018). Available at SSRN: https://ssrn.com/abstract=3201734 or http://dx.doi.org/10.2139/ssrn.3201734

Zhen Xu

Columbia University, Department of Industrial Engineering and Operations Research (IEOR), Students ( email )

New York, NY
United States

Hailun Zhang (Contact Author)

CUHK, Shenzhen ( email )

Longxiang Avenue 2001
Longgang District
Shenzhen, Guangdong 518100
China

Jiheng Zhang

HKUST ( email )

Clear Water Bay
Kowloon
Hong Kong

Rachel Zhang

Hong Kong University of Science & Technology (HKUST) ( email )

Clear Water Bay, Kowloon
Hong Kong, 999999
Hong Kong

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