Online Demand Fulfillment Problem with Initial Inventory Placement: A Regret Analysis

Studying How Inventory Placement Shapes Online Fulfillment Performance A growing share of e-commerce operations involves deciding not only how to fulfill incoming orders, but also where to position inventory beforehand. In “Online Demand Fulfillment Problem with Initial Inventory Placement: A Regret Analysis,” Arlotto, Keskin, and Wei examine how these two decisions interact. The authors introduce a joint regret framework that evaluates the performance of a fulfillment policy together with the initial allocation of inventory across warehouses. Their analysis shows that probabilistic fulfillment inevitably accumulates regret that grows with the length of the planning horizon, regardless of how inventory is initially placed. By contrast, when combined with an appropriate offline inventory placement, the score-based approach achieves a regret bound that remains stable over time and scales only with the size of the system. The study offers insight into the role of initial placement in shaping fulfillment policy performance.

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Publication Details

Journal
Operations Research
Published
2026-02-12
DOI
https://doi.org/10.1287/opre.2024.0983
Primary Topic
Supply Chain and Inventory Management
Type
article
Field-Weighted Citation Impact
0.00
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article

Online Demand Fulfillment Problem with Initial Inventory Placement: A Regret Analysis

Alessandro Arlotto, Irem Nur Keskin, Yehua Wei
Operations Research
Supply Chain and Inventory Management
article

Online Demand Fulfillment Problem with Initial Inventory Placement: A Regret Analysis

Alessandro Arlotto, Irem Nur Keskin, Yehua Wei
article en

Abstract

Studying How Inventory Placement Shapes Online Fulfillment Performance A growing share of e-commerce operations involves deciding not only how to fulfill incoming orders, but also where to position inventory beforehand. In “Online Demand Fulfillment Problem with Initial Inventory Placement: A Regret Analysis,” Arlotto, Keskin, and Wei examine how these two decisions interact. The authors introduce a joint regret framework that evaluates the performance of a fulfillment policy together with the initial allocation of inventory across warehouses. Their analysis shows that probabilistic fulfillment inevitably accumulates regret that grows with the length of the planning horizon, regardless of how inventory is initially placed. By contrast, when combined with an appropriate offline inventory placement, the score-based approach achieves a regret bound that remains stable over time and scales only with the size of the system. The study offers insight into the role of initial placement in shaping fulfillment policy performance.

Operations Research
Duke University (US)
Openalex Percentile: Top 63%
Supply Chain and Inventory Management
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