Optimal Wave Release Times for Order Fulfillment Systems with Deadlines

Service performance of an order fulfillment system is mainly determined by how quickly and accurately it fills customer orders. A higher service level can be offered with a later cutoff time, before which customers are assured of receiving their orders. However, the desire to offer a later cutoff time must be tempered by the need to provide service at low cost, which means taking advantage of economies of scale in picking operations. To strike this balance, many distribution centers release orders in large batches called waves. We develop analytical models to determine the timing and the number of order waves for fulfillment systems that operate against a daily deadline. In a case study, we apply our theoretical models to data from a large distribution center and show that optimal wave releases could significantly improve on time shipments compared to an intuitive method.