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Comparison of lead time quotation policies in e-commerce environment

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2019
Altuntaş, Ecem
This research is based on problems faced by e-commerce firms while determining lead time for their customers. It is hard to obtain an optimal policy for the tradeoff between serving on-time and quoting short lead times. On-time customer services are positively correlated with rating scores of firms in e-commerce websites. Therefore, in this study, the fluctuation of on-time customer service proportion is used as the main determinant of the rating of the firms and different policies of lead time quotation are compared for managerial insights that can be used in the e-commerce environment. While analyzing policies for the lead time quotation, Semi-Markov Decision Process is used to model the problem and a simulation model is used for demonstrating different scenarios to evaluate lead time quotation policies.