In the new landscape of e-commerce distribution, firms must offer increasingly aggressive delivery promises and then make good on them. These promises often take the form of a cutoff time, such that orders placed before the cutoff time receive premium service (next-day, same-day, etc.) and those placed afterward do not. Later cutoff times are stronger, of course, but the fulfillment system might not be able to process the order before the deadline. How late is too late? We develop a deterministic model to answer this and related questions when the order fulfillment system batches orders for efficient picking operations and therefore exhibits a phenomenon we call capacity degradation.
Progress in Material Handling Research: 2014
Gue, Kevin R., "Setting Cutoff Times for Picking Systems with Capacity Degradation" (2014). 13th IMHRC Proceedings (Cincinnati, Ohio. USA – 2014). 10.