Integrated Shipment Consolidation and Vehicle Routing Problem (VRP) for Profit Maximization in E-commerce Supply Chains with Dynamic Demand

The expanding global healthcare e-commerce market, fueled by innovations and increased online medication sales, urges hospitals and healthcare entities to embrace B2B e-commerce for efficient procurement of medical supplies. In the realm of B2B e-commerce for medical supplies, suppliers frequently manage the delivery process, ensuring the requisite care during transportation to customers. This underscores the vital need for strategic delivery approaches to optimize profitability within the competitive e-commerce landscape. This study introduces an innovative approach that integrates shipment consolidation and the Vehicle Routing Problem (VRP) to optimize long-run average profit in B2B e-commerce for medical supplies. The research formulates models considering demand dynamics, explicitly addressing demand sensitivity to both price and lead time. The study explores the intricate relationships between optimal shipment consolidation cycles (T*), pricing strategies, and delivery routes. Through numerical experiments and a comprehensive sensitivity analysis involving various parameters, including demand sensitivity, cost factors, and vehicle capacity, the research highlights the adaptability crucial for optimal T*, optimal p*, and profit. Insights are extended to scenarios with dispersed buyer locations and varying buyer numbers, demonstrating the integrated approach