A robust ordering strategy for retailers facing a free shipping option.
Free shipping with conditions has become one of the most effective marketing tools available. An increasing number of companies, especially e-businesses, prefer to offer free shipping with some predetermined condition, such as a minimum purchase amount by the customer. However, in practice, the dema...
| Main Authors: | , , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
Public Library of Science (PLoS)
2015-01-01
|
| Series: | PLoS ONE |
| Online Access: | http://europepmc.org/articles/PMC4437986?pdf=render |
| _version_ | 1811294116914397184 |
|---|---|
| author | Qing-chun Meng Xiao-le Wan Xiao-xia Rong |
| author_facet | Qing-chun Meng Xiao-le Wan Xiao-xia Rong |
| author_sort | Qing-chun Meng |
| collection | DOAJ |
| description | Free shipping with conditions has become one of the most effective marketing tools available. An increasing number of companies, especially e-businesses, prefer to offer free shipping with some predetermined condition, such as a minimum purchase amount by the customer. However, in practice, the demands of buyers are uncertain; they are often affected by many factors, such as the weather and season. We begin by modeling the centralized ordering problem in which the supplier offers a free shipping service and retailers face stochastic demands. As these random data are considered, only partial information such as the known mean, support, and deviation is needed. The model is then analyzed via a robust optimization method, and the two types of equivalent sets of uncertainty constraints that are obtained provide good mathematical properties with consideration of the robustness of solutions. Subsequently, a numerical example is used to compare the results achieved from a robust optimization method and the linear decision rules. Additionally, the robustness of the optimal solution is discussed, as it is affected by the minimum quantity parameters. The increasing cost-threshold relationship is divided into three periods. In addition, the case study shows that the proposed method achieves better stability as well as computational complexity. |
| first_indexed | 2024-04-13T05:11:51Z |
| format | Article |
| id | doaj.art-4419fe32f1e8494bab090e57e339d7a8 |
| institution | Directory Open Access Journal |
| issn | 1932-6203 |
| language | English |
| last_indexed | 2024-04-13T05:11:51Z |
| publishDate | 2015-01-01 |
| publisher | Public Library of Science (PLoS) |
| record_format | Article |
| series | PLoS ONE |
| spelling | doaj.art-4419fe32f1e8494bab090e57e339d7a82022-12-22T03:01:00ZengPublic Library of Science (PLoS)PLoS ONE1932-62032015-01-01105e012593910.1371/journal.pone.0125939A robust ordering strategy for retailers facing a free shipping option.Qing-chun MengXiao-le WanXiao-xia RongFree shipping with conditions has become one of the most effective marketing tools available. An increasing number of companies, especially e-businesses, prefer to offer free shipping with some predetermined condition, such as a minimum purchase amount by the customer. However, in practice, the demands of buyers are uncertain; they are often affected by many factors, such as the weather and season. We begin by modeling the centralized ordering problem in which the supplier offers a free shipping service and retailers face stochastic demands. As these random data are considered, only partial information such as the known mean, support, and deviation is needed. The model is then analyzed via a robust optimization method, and the two types of equivalent sets of uncertainty constraints that are obtained provide good mathematical properties with consideration of the robustness of solutions. Subsequently, a numerical example is used to compare the results achieved from a robust optimization method and the linear decision rules. Additionally, the robustness of the optimal solution is discussed, as it is affected by the minimum quantity parameters. The increasing cost-threshold relationship is divided into three periods. In addition, the case study shows that the proposed method achieves better stability as well as computational complexity.http://europepmc.org/articles/PMC4437986?pdf=render |
| spellingShingle | Qing-chun Meng Xiao-le Wan Xiao-xia Rong A robust ordering strategy for retailers facing a free shipping option. PLoS ONE |
| title | A robust ordering strategy for retailers facing a free shipping option. |
| title_full | A robust ordering strategy for retailers facing a free shipping option. |
| title_fullStr | A robust ordering strategy for retailers facing a free shipping option. |
| title_full_unstemmed | A robust ordering strategy for retailers facing a free shipping option. |
| title_short | A robust ordering strategy for retailers facing a free shipping option. |
| title_sort | robust ordering strategy for retailers facing a free shipping option |
| url | http://europepmc.org/articles/PMC4437986?pdf=render |
| work_keys_str_mv | AT qingchunmeng arobustorderingstrategyforretailersfacingafreeshippingoption AT xiaolewan arobustorderingstrategyforretailersfacingafreeshippingoption AT xiaoxiarong arobustorderingstrategyforretailersfacingafreeshippingoption AT qingchunmeng robustorderingstrategyforretailersfacingafreeshippingoption AT xiaolewan robustorderingstrategyforretailersfacingafreeshippingoption AT xiaoxiarong robustorderingstrategyforretailersfacingafreeshippingoption |