CONSUMER DIRECT FULFILLMENT PERFORMANCE IN INTERNET RETAILING: EMERGENCY TRANSSHIPMENTS AND DEMAND DISPERSION

Research output: Contribution to journalArticle

24 Scopus citations

Abstract

The collaborative fulfillment of consumer orders by Internet retailers and wholesalers has proven important in the realization of sustainable levels of online profitability. Concentrating on consumer direct fulfillment (or drop shipping), an empirical simulation model evaluates avenues for improving logistical performance. The empirical simulation model centers on the online music CD retailing industry. It evaluates the effects of emergency transshipments and demand dispersion on inventory and product-release performance, as well as on transportation costs, in consumer direct fulfillment operations. Results show that emergency transshipments improve inventory and product-release performance in these operations. Furthermore, the inventory-performance improvements are maximized when inventory facilities fulfill demand that is uniformly balanced across markets primarily assigned to each facility. Finally, gains in inventory and release performance obtained from emergency transshipments outweigh additional transportation costs incurred from a greater reliance on emergency transshipments for consumer direct fulfillment.

Original languageEnglish (US)
Pages (from-to)79-112
Number of pages34
JournalJournal of Business Logistics
Volume26
Issue number1
DOIs
StatePublished - Mar 1 2005
Externally publishedYes

Keywords

  • Electronic Commerce
  • Fulfillment
  • Inventory Management
  • Simulation
  • Transportation

ASJC Scopus subject areas

  • Business, Management and Accounting (miscellaneous)
  • Management Science and Operations Research

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