The two-stage batch ordering strategy of logistics service capacity with demand update

• The two-stage batch ordering strategy of logistics service capacity is studied.
• Demand update and standard batch size are introduced.
• The model is solved with scenario analysis and enumerative algorithm.
• Sensitivity analysis of the optimal adjustment ordering time point is provided.

This paper discusses a logistics service integrator (LSI) orders logistics service capacity from a functional logistics service provider (FLSP) before the selling season with two opportunities. The optimal two-stage batch ordering strategy of LSI with demand update is studied. Standard batch size is introduced into LSI’s two-stage capacity ordering strategy model, which is built upon the decision-making sequence and actually observed demand signals between the two ordering instants. The model solution method is designed based on scenario analysis and enumerative algorithm. Sensitivity analysis of the optimal adjustment ordering time point is then carried out and a numerical analysis is presented.