Split-order consolidation optimization for online supermarkets: Process analysis and optimization models

The large-scale online supermarket is a newly emerging online retailing mode which brings great convenience to people. Online supermarkets are characterized by having large amounts of daily orders with potentially multiple items, diverse delivery times, and a high order-split rate. Multiple shipments for one order caused by order splitting result in high cost and disturbance and a large number of discarded consumable packages at online retailers and customers, causing severe damage to the environment. Accordingly, research on split-order consolidation fulfilment is critical for the advancement of the practice and theory in the context of highly complex online retailing. This paper first analyzes the characteristics and the challenges associated with the split-order consolidation problem that online supermarket is confronting and summarizes the new operational process of split-order consolidation fulfilment. Then, a time-space network optimization model is built, and its corresponding solution algorithm is presented to solve the questions of where and when to consolidate the split orders. Finally, the computation results of the numerical experiments are provided to verify the effectiveness of the algorithm, and a sensitivity analysis of the relevant parameters is performed. This work highlights the effect of order consolidation processes and fulfilment methods on the order fulfilment decision-making for online supermarkets. The purpose of this article is to help pave the way for more effective online supermarket management and order implementation.