Patent ID: 8265986

Claim:
A computer implemented method for optimizing order fulfillment by considering multiple supply modes, comprising: planning supply of inventory, by a processor, said step of planning supply of inventory comprising at least, forecasting demand, estimating accuracy of said forecasted demand, and establishing reorder point policy based at least on said accuracy of said forecasted demand, a plurality of supply transportation modes, cost of carbon emissions and limit on carbon emission credits, wherein an objective function is modeled to solve for the reorder point policy and the reorder point policy includes reorder points comprising quantities ordered using different supply modes, wherein the objective function minimizes inventory cost and the cost of carbon emission and wherein the objective function enables prioritizing one or more of reducing the cost of carbon emissions or reducing the inventory cost, wherein the reorder point policy comprises reorder points determined by solving a minimization function, min ⁢ ∑ m = 1 M ⁢ ( ∑ k = 1 2 ⁢ c m k ⁢ X m k ⁡ ( 1 , T ) + ∑ t = 1 T ⁢ h m ⁢ E ⁡ [ ∑ k = 1 2 ⁢ X m k ⁡ ( 1 , t - l k ) - D m ⁡ ( 1 , t ) ] + ) subject to constraints ∑ m ∈ A j ⁢ ⁢ ∑ k = 1 2 ⁢ ⁢ c m k ⁢ X m k ⁡ ( 1 , T ) ≤ C j max ⁢ ⁢ for ⁢ ⁢ all ⁢ ⁢ product ⁢ ⁢ groups ⁢ ⁢ j ∈ J , ⁢ P ⁡ [ ∑ k = 1 2 ⁢ ⁢ X m k ⁡ ( 1 , t - l k ) ≥ D m ⁡ ( 1 , t ) ] ≥ α m ⁢ ⁢ for ⁢ ⁢ all ⁢ ⁢ m ∈ M ⁢ ⁢ and ⁢ ⁢ t = 1 , … ⁢ , T wherein, T represents total number of periods in a planning horizon, X m k (1,T) represents total order quantity for product m using supply mode k, M represents a set of existing products indexed by m, J represents a set of product groups indexed by j, A j represents a set of product I in product group jεJ, t represents time index for period, t=1, . . . , T, where T represents number of periods, D mt represents demand forecast for product m in period t, D m ⁡ ( 1 , t ) := ∑ s = 1 , ⁢ … ⁢ ⁢ t ⁢ D m ⁢ ⁢ s cumulative demand forecast for product m, X mt k represents fulfillment quantity for product m using supply mode k in period t, X m k (1,t) represents cumulative fulfillment quantity for product m using supply mode k in period t, c m k represents carbon emission cost for each unit of product m using supply mode k, C i max represents carbon emission limit for transportation of product group j, h m represents inventory cost for each unit of product m per period, α m represents serviceability target for product m.