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Publications

Publications by Pedro Amorim

2024

Personalized choice model for forecasting demand under pricing scenarios with observational data-The case of attended home delivery

Authors
Ali, ÖG; Amorim, P;

Publication
INTERNATIONAL JOURNAL OF FORECASTING

Abstract
Discrete choice models can forecast market shares and individual choice probabilities with different price and alternative set scenarios. This work introduces a method to personalize choice models involving causal variables, such as price, using rich observational data. The model provides interpretable customer- and context-specific preferences, and price sensitivity, with an estimation procedure that uses orthogonalization. We caution against the nalive use of regularization to deal with the high-dimensional observational data challenge. We experiment with the attended home delivery (AHD) slot choice problem using data from a European online retailer. Our results indicate that while the popular non-personalized multinomial logit (MNL) model does very well at the aggregate (day-slot) level, personalization provides significantly and substantially more accurate predictions at the individual-context level. But the nalive personalization approach using regularization without orthogonalization wrongly predicts that the choice probability will increase if the slot price increases, rendering it unfit for forecasting demand with pricing scenarios. The proposed method avoids this problem. Further, we introduce features based on potential consideration sets in the AHD slot choice context that increase accuracy and allow for more realistic substitution patterns than the proportional substitution implied by MNL.

2023

Collaborative Network Model to Reduce Logistics Costs in a Competition Environment

Authors
Vazquez-Noguerol, M; Comesaña-Benavides, JA; Prado-Prado, JC; Amorim, P;

Publication
COLLABORATIVE NETWORKS IN DIGITALIZATION AND SOCIETY 5.0, PRO-VE 2023

Abstract
In the current competition environment, transportation costs continue to rise, causing a reduction in the profit margins of companies. There are several tools in the literature to support the planning of logistics activities, but individualised solutions are not yet effective. In this study, a linear programming model is proposed to jointly plan the demand fulfilment of two competing companies by encouraging the search for synergies that enhance collaboration in the use of existing resources. To demonstrate the validity of the proposed mode, a case study is carried out and the results obtained with the initiation of the collaboration are evaluated. In conclusion, the proposed model reduces the logistics costs by up to 13%, as well as decreases the carbon footprint by 37%. By focusing on optimising economic and environmental aspects, this approach serves as a guide for companies to promote collaborations and to facilitate decision making at a managerial level.

2023

Using Supplier Networks to Handle Returns in Online Marketplaces

Authors
Pinto, C; Figueira, G; Amorim, P;

Publication
OPERATIONAL RESEARCH, IO 2022-OR

Abstract
To encourage customers to take a chance in finding the right product, retailers and marketplaces implement benevolent return policies that allow users to return items for free without a specific reason. These policies contribute to a high rate of returns, which result in high shipping costs for the retailer and a high environmental toll on the planet. This paper shows that these negative impacts can be significantly minimized if inventory is exchanged within the supplier network of marketplaces upon a return. We compare the performance of this proposal to the standard policy where items are always sent to the original supplier. Our results show that our proposal-returning to a closer supplier and using a predictive heuristic for fulfilment-can achieve a 16% cost reduction compared to the standard-returning to the original supplier and using a myopic rule for fulfilment.

2023

How E-Commerce Companies Can Reduce Returns

Authors
Amorim, P; Calvo, E; Wagner, L;

Publication
MIT SLOAN MANAGEMENT REVIEW

Abstract
[No abstract available]

2024

Customer Preferences for Delivery Service Attributes in Attended Home Delivery

Authors
Amorim, P; Dehoratius, N; Eng Larsson, F; Martins, S;

Publication
MANAGEMENT SCIENCE

Abstract
Retailers face increasing competitive pressure to determine how best to deliver products purchased online to the end customer. Grocery retailers often require attended home delivery where the customer must be present to receive the delivery. For attended home delivery to function, the retailer and customer must agree on a delivery time slot that works for both parties. Using online data from a grocery retailer, we observe customer preferences for three delivery service attributes associated with each time slot: speed, precision, and timing. We define speed as the expected time between the placement of an order and its delivery, precision as the duration of the offered time slot, and timing as the availability of choices across times of the day and days of the week. We show that customers not only value speed as an attribute of delivery service but that precision and timing are also key drivers of the customer's time slot selection process. We also observe substantial customer heterogeneity in the willingness of customers to pay for time slots. Customers that differ in their loyalty to the retailer, basket value, basket size, and basket composition exhibit distinct differences in their willingness to pay. We show that retailers with the capability to tailor their time slot offerings to specific customer segments have the potential to generate approximately 9% more shipping revenue than those who cannot. Our findings inform practitioners seeking to design competitive fulfillment strategies and academics customer behavior in the attended home context.

2024

Learning efficient in-store picking strategies to reduce customer encounters in omnichannel retail

Authors
Neves Moreira, F; Amorim, P;

Publication
INTERNATIONAL JOURNAL OF PRODUCTION ECONOMICS

Abstract
Omnichannel retailers are reinventing stores to meet the growing demand of the online channel. Several retailers now use stores as supporting distribution centers to offer quicker Buy-Online-Pickup-In-Store (BOPS) and Ship-From-Store (SFS) services. They resort to in-store picking to serve online orders using existing assets. However, in-store picking operations require picker carts traveling through store aisles, competing for store space, and possibly harming the offline customer experience. To learn picking policies that acknowledge interactions between pickers and offline customers, we formalize a new problem called Dynamic In-store Picker Routing Problem (diPRP). This problem considers a picker that tries to pick online orders (seeking) while minimizing customer encounters (hiding) - preserving the offline customer experience. We model the problem as a Markov Decision Process (MDP) and solve it using a hybrid solution approach comprising mathematical programming and reinforcement learning components. Computational experiments on synthetic instances suggest that the algorithm converges to efficient policies. We apply our solution approach in the context of a large European retailer to assess the proposed policies regarding the number of orders picked and customers encountered. The learned policies are also tested in six different retail settings, demonstrating the flexibility of the proposed approach. Our work suggests that retailers should be able to scale the in-store picking of online orders without jeopardizing the experience of offline customers. The policies learned using the proposed solution approach reduced the number of customer encounters by up to 50%, compared to policies solely focused on picking orders. Thus, to pursue omnichannel strategies that adequately trade-off operational efficiency and customer experience, retailers cannot rely on actual simplistic picking strategies, such as choosing the shortest possible route.

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