A NOVEL OPTIMISATION ALGORITHM FOR PRODUCT BASKET COMBINATION BASED ON MUTUAL INFORMATION AND LOGISTIC COSTS

摘要

The total cost of a product is considerably driven by logistics of delivering the product from plant to customer and transportation in turn accounts for considerable cost in logistics. This paper proposes a novel optimization approach for reducing the logistics cost by introducing an intermediate virtual layer that connects the original online store to the end customer. We investigate the joint optimization of logistics cost and promotion offers, the logistics costs include the installation cost and distance-dependent variable and consider the overhead cost of product transportation. Further, we have looked at promoting similar products for optimizing the total cost by joint optimization of promotion scheme and logistics costs. The obtained results show that the proposed model is capable of assigning the unused capacity of transportation fleet for enabling the promotion mechanism and so yielding more profit in comparison with a classic model.