A Policy Decomposition Framework for Dynamic Order Fulfillment Operations

Modern supply chains span diverse operational environments, ranging from e-commerce distribution networks to customized production-to-order manufacturing lines. Across these settings, operational efficiency depends on coordinating two highly interdependent stages: order preparation and downstream delivery. Although these stages are traditionally managed in isolation, real-world fulfillment systems must satisfy stringent delivery expectations under dynamic stochastic order arrivals. To bridge this gap, we introduce the Dynamic Order Fulfillment Problem (DOFP), a new problem class unifying logistical challenges previously studied separately. We model DOFP as a Markov decision process whose state and decision spaces are partitioned into preparation and delivery sub-spaces, linked by synchronization constraints. While recent approaches attempt to optimize both fulfillment stages simultaneously over myopic rolling horizons, our framework isolates and optimizes the downstream delivery policy, treating preparation strictly as a state-level constraint filter. To solve this, we develop the Decomposition-Driven Framework with Value Function Approximation (DDF-VFA), which utilizes a novel policy-level decomposition. This design partitions the search into a delivery-stage master problem and a preparation-stage compatibility subproblem, iteratively refined via feedback loops. DDF-VFA executes this strategy by combining a large-neighborhood search over partial delivery decisions with a neural-network value function approximation for the cost-to-go. Numerical illustrations on two example variants using real-world datasets show that DDF-VFA consistently outperforms benchmarks that optimize the two stages independently or jointly without decomposition. Finally, the framework naturally scales to accommodate additional real-world complexities such as batched or multi-stage preparation.

Context-Aware Synthesis of Optimization Pipelines for Warehouse Optimization

Order fulfillment in manual picker-to-goods warehouses involves interconnected decisions such as item assignment, order batching, and picker routing. While integrated models capture interactions between these decisions, practical warehouse systems often require decomposed approaches due to organizational boundaries, differing responsibilities, or limited data availability. Existing studies primarily evaluate algorithms for isolated subproblems or fixed subproblem combinations for specific warehouse settings, but lack a general mechanism to determine applicable algorithm configurations, compose them into valid solution pipelines, and assess their performance. With Context-Aware Synthesis of Optimization Pipelines (CASOP), we propose a framework for constructing and evaluating context-specific optimization pipelines and apply these to order fulfillment. The framework comprises: (1) a modular repository of algorithms for common order fulfillment problems; (2) semantic data and algorithm cards to describe warehouse context and algorithm requirements; (3) a taxonomy that structures order fulfillment problems into relevant subproblems; (4) a pipeline synthesizer that identifies applicable algorithms for a given warehouse context and composes all valid optimization pipelines; and (5) a pipeline evaluator that assesses all resulting pipelines. We demonstrate the framework on 7 benchmark instance sets covering four problem classes, resulting in 1,063,044 valid pipelines. The framework supports researchers and practitioners in designing, automatically synthesizing, and selecting valid, high-performing algorithmic pipelines for warehouse operations. The software is open-source and available at https://github.com/kit-dsm/ware_ops_pipes and https://github.com/kit-dsm/ware_ops_algos. Keywords: Warehouse optimization, Algorithm selection, Pipeline synthesis, Order fulfillment