Joint Transshipment and Pricing Decision for a Major Fast Fashion Retailer

What is it about?

This research is based on joint transshipment and pricing problem that a major fast fashion retailer faces. We designed a heuristic based on Benders Decomposition to determine upper bounds and a simulated annealing-based metaheuristic to identify high-quality solutions. To improve the efficiency of the Benders Decomposition algorithm, we used a Covering-Cut-Bundle technique, which significantly accelerated convergence. Additionally, we performed a series of experiments to evaluate how business rules affect the retailer’s operations and to assess the effectiveness of combined markdown and transshipment strategies.

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Why is it important?

The paper is among the rare examples of joint transshipment and pricing decisions are dealt in real life setting. Usually some simplification assumptions are faced and real life business rules are neglected. That is why most of the research lose their practical relevance.

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