Universität zu Köln

Steinker, Sebastian, Hoberg, Kai ORCID: 0000-0003-2835-572X and Thonemann, Ulrich W. (2017). The Value of Weather Information for E-Commerce Operations. Prod. Oper. Manag., 26 (10). S. 1854 - 1875. HOBOKEN: WILEY. ISSN 1937-5956

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Abstract

To be efficient, logistics operations in e-commerce require warehousing and transportation resources to be aligned with sales. Customer orders must be fulfilled with short lead times to ensure high customer satisfaction, and the costly under-utilization of workers must be avoided. To approach this ideal, forecasting order quantities with high accuracy is essential. Many drivers of online sales, including seasonality, special promotions and public holidays, are well known, and they have been frequently incorporated into forecasting approaches. However, the impact of weather on e-commerce operations has not been rigorously analyzed. In this study, we integrate weather data into the sales forecasting of the largest European online fashion retailer. We find that sunshine, temperature, and rain have a significant impact on daily sales, particularly in the summer, on weekends, and on days with extreme weather. Using weather forecasts, we have significantly improved sales forecast accuracy. We find that including weather data in the sales forecast model can lead to fewer sales forecast errors, reducing them by, on average, 8.6% to 12.2% and up to 50.6% on summer weekends. In turn, the improvement in sales forecast accuracy has a measurable impact on logistics and warehousing operations. We quantify the value of incorporating weather forecasts in the planning process for the order fulfillment center workforce and show how their incorporation can be leveraged to reduce costs and increase performance. With a perfect information planning scenario, excess costs can be reduced by 11.6% compared with the cost reduction attainable with a baseline model that ignores weather information in workforce planning.

Item Type:	Journal Article
Creators:	Creators Email ORCID ORCID Put Code Steinker, Sebastian UNSPECIFIED UNSPECIFIED UNSPECIFIED Hoberg, Kai UNSPECIFIED orcid.org/0000-0003-2835-572X UNSPECIFIED Thonemann, Ulrich W. UNSPECIFIED UNSPECIFIED UNSPECIFIED
URN:	urn:nbn:de:hbz:38-215949
DOI:	10.1111/poms.12721
Journal or Publication Title:	Prod. Oper. Manag.
Volume:	26
Number:	10
Page Range:	S. 1854 - 1875
Date:	2017
Publisher:	WILEY
Place of Publication:	HOBOKEN
ISSN:	1937-5956
Language:	English
Faculty:	Unspecified
Divisions:	Unspecified
Subjects:	no entry
Uncontrolled Keywords:	Keywords Language PREDICTIVE ACCURACY; LIFE SATISFACTION; MOOD; BEHAVIOR; SALES; SUNSHINE; MODELS; OPTIMIZATION; TEMPERATURE; RETAILER Multiple languages Engineering, Manufacturing; Operations Research & Management Science Multiple languages
Refereed:	Yes
URI:	http://kups.ub.uni-koeln.de/id/eprint/21594