Abstract
We consider the joint decision problem of renting three types of warehouses and allocating products among the warehouses in an E-commerce supply network, which are supplier, regional, and local warehouses. The research is motivated by a real-world emerging problem in an open warehouse platform (OWP) environment. We focus on the distinct characteristics of a network using an OWP and its underlying cost drivers and propose a nonlinear mixed integer programming model that reflects the interdependencies among inbound transportation, warehousing, delivery, and return, as well as time-sensitive demand. Our nonlinear model with multiple products is converted into a linear form so that it can be solved by a solver. The application of the model to a real-world case of a leading E-commerce company in China demonstrates a significant potential to increase profit, and our sensitivity analysis provides insights for operations managers into warehouse rent and inventory decisions.