Stabilizing and improving the optimization models for inventory and order allocation across warehouse locations, in cooperation with Otto Group one.O

The Chair of Industrial Management at TU Dresden is pleased to announce the start of its cooperation with Otto Group one.O on improving the control logic of the stock flow. The project focuses on refining the optimization models behind it, which allocate inventory and orders across several warehouse locations.

In e-commerce, decisions have to be made every day about which orders are fulfilled from which location. Available inventory, the capacity of each location and the expected order volumes have to be taken into account at the same time. Combined with the large number of different items in the assortment, this results in models of considerable size. To solve them under the requirements of day-to-day operations, both the model formulations and the solution methods have to be tailored specifically to the business and technical constraints of the setting.

In a first step, the processes are analyzed and the existing solution approach is reviewed. Building on this, the models are then extended methodologically and evaluated under the current conditions.