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This paper is joint work with Stefan Minner and addresses the problem of finding the optimal parcel type portfolio in e-commerce by considering the costs for shipping, the cost of unused space and the cost of variety depending on the parcel portfolio. For solving the problem, a scalable decomposition method is developed that allows relaxing many binary variables. It particularly repairs infeasible solutions to improve upper bounds efficiently and avoids solving many subproblems by identifying relations between those.
The results show that increasing the number of parcel types first can significantly reduce the unused space but the marginal contribution reduces and that allowing order splitting into several parcels is less effective.
Operations Research is the flagship journal in the area of OR and not only ranked A+ in the VHB-Jourqual Ranking but also on the business rankings FT50 and UTD24.
The paper is available here.