Optimal and Order-optimal Gated Priority-based Greedy Policies for Two-layer Multi-item Order Fulfillment
Not on the map. Why?
Abstract (arXiv)
We study how an e-commerce firm should make real-time fulfillment decisions in a two-layer distribution network when multi-item customer orders arrive sequentially and future demand is unknown. The central managerial tension is whether to use scarce front distribution center (FDC) inventory to save current fulfillment cost or preserve that inventory for future orders that may be more valuable to serve locally. We formulate an adversarial online model with multiple FDCs, one regional distribution center (RDC), multi-unit multi-item orders, and item-specific and time-varying variable costs. Our theoretical objective is to characterize when simple, interpretable, and implementable fulfillment rules can perform nearly as well as an optimal clairvoyant planner. We develop a family of Gated Priority-based Greedy policies, derive competitive-ratio guarantees under both time-varying and time-invariant cost structures, and establish matching or near-matching lower bounds for any online algorithm. Numerical experiments show that the proposed policies perform strongly relative to generalized myopic and forecast-based benchmarks. The analysis yields managerial guidance on when local inventory should be protected, when splitting orders is worth the fixed-cost burden, and how the relative magnitudes of fixed and variable costs determine the value of more sophisticated optimization.
Key facts. No citing papers in the map yet (data through 14 Oct 2026). Builds on 1 of its 29 references that are in the map. First posted on arXiv 25 May 2026.
Builds on
1 of 29 references.
References · 1
- 2026Online Order Fulfillment with Replenishmentcited by 1
Built on by
Not cited yet.
Similar, not cited
Close in wording, no citation either way
- 2026OR-Transformer: Scaling Real-Time Decision-Making to 1,000 Items
- 2025Outbound Modeling for Inventory Management
- 2025Offline Dynamic Inventory and Pricing Strategy: Addressing Censored and Dependent Demand
- 2025Computing optimal policies for managing inventories with noisy observations
- 2025Reinforcement Learning for Efficient Returns Management
- 2025Reinforcement Learning in Queue-Reactive Models: Application to Optimal Execution
- 2026InvEvolve: Evolving White-Box Inventory Policies via Large Language Models with Performance Guarantees
- 2025Classical and Deep Reinforcement Learning Inventory Control Policies for Pharmaceutical Supply Chains with Perishability and Non-Stationarity