JD.com Improves Delivery Networks by a Multi-Period Facility Location Model

INFORMS Journal on Applied Analytics, Forthcoming

28 Pages Posted: 12 Mar 2021

See all articles by Ningxuan Kang

Ningxuan Kang

JD.com Smart Supply Chain Y

Hao Shen

Renmin University of China - School of Business

Ye Xu

Bianlifeng

Date Written: January 7, 2021

Abstract

As delivery systems play an increasingly significant role in modern life, it is of strategical importance to design an efficient and adaptive delivery network. JD.com is the largest Business-to-Consumer (B2C) e-commerce company by revenue in China and has built the largest amount of logistics infrastructure nationwide. In this study, we developed an optimization model to automatically make annual plans of the delivery stations that minimize operational costs. We built an optimization algorithm by adopting a multi-period facility location model using Mixed Integer Linear Programming (MILP) method and proposing applicable techniques to solve the model. The results demonstrate that our model generates improved plans than manually planning in terms of both operational cost and delivery distance. The tool described in this paper is helping JD.com save delivery costs and gain operational benefits on designing delivery networks.

Keywords: dynamic facility location problem, delivery networks, mixed-integer linear programming

Suggested Citation

Kang, Ningxuan and Shen, Hao and Xu, Ye, JD.com Improves Delivery Networks by a Multi-Period Facility Location Model (January 7, 2021). INFORMS Journal on Applied Analytics, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3764318

Ningxuan Kang

JD.com Smart Supply Chain Y ( email )

Hao Shen (Contact Author)

Renmin University of China - School of Business ( email )

Beijing
China

Ye Xu

Bianlifeng ( email )

Beijing, 100028
China

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