By Yeawon Yoo
Want to learn how Amazon delivers the item you ordered last night in front of your doorstep today? The plenary session titled “Transportation Network Design at Amazon” gives you an idea. The session starts with the introduction from Georgia Perakis, a plenary and keynote chair. She introduced Russell Allgor who completed his PhD in MIT, and before joining Amazon, moved to Germany to work at Bayer AG’s headquarters. He started working at Amazon in 2000.
Russell Allgor, a chief scientist from Amazon, started his speech with Amazon’s virtuous cycle and mission: “The mission of our team is how to deliver the packages to the customers faster and cheaper and on time, and what would be an additional investment for this problem,” he said.
“There are decisions on different time horizons. We make a decision when designing infrastructure investments to expand the network and when planning the network operation. Finally, we have to execute the plan in real time. However, the decision is subjective to the decision made in the planning and design phase.”
As many people know, there are two main express services, Prime Now and Prime Delivery. Prime Now is a fast local delivery, which delivers household items and essentials you need every day and the best-seller items of Amazon. Russell said, “here are the problems: We have to estimate when customers are ordering, what customers are ordering, and how much the delivery cost. So, we created the software to estimate the travel times. It accounts for the road network, time of day, day of week, cultural events, and seasonality. We also estimate the delivery cost.”
The other end of the spectrum, primary delivery, has a challenge. The customers and inventory are all over the U.S. He presented the mathematical model to solve the problem. He said, “There are challenges in solving the problem with the formulation. First, the model is large. There are millions of variable and constraints for U.S. network and the network has a time dimension. Second, the model is deterministic, even though actual demand is stochastic. Third, we also need to integrate the air network and flows for the network. Lastly, it depends on transportation design.” Russell ends his plenary speech by opening the door to new possibility for INFORMS community.