Dimensional Decomposition and Column Generation for Bin Dimensioning in E-Commerce Fulfillment Centers

Abstract

A fulfillment center (FC) is a specialized logistics facility where e-commerce inventory is received, stored, and processed. Its internal organization directly impacts space utilization and the performance of put-away and picking operations. Items are stored in bins following strict operational guidelines to ensure productivity in both activities, so bin dimensions must be tailored to the product profile of each facility to maximize space utilization. % We address the bin dimensioning problem arising in e-commerce fulfillment centers: given a set of candidate bin types and a large, heterogeneous inventory, determine the number of bins of each type and assign all items so as to minimize total bin volume, subject to operational constraints governing how products may be combined within a single bin. We develop a dimensional decomposition that exploits these constraints to reduce the three-dimensional packing problem to a one-dimensional block-positioning problem. Building on this decomposition, we formulate the problem as a mixed-integer linear program and propose two solution methods: a Best-Fit-Decreasing (BFD) heuristic and a column generation scheme that produces tight LP lower bounds. Computational experiments on four synthetic datasets, calibrated on proprietary data from an American e-commerce fintech and ranging from 1.5 thousand to 1.5 million SKUs, show that the BFD heuristic scales to instances with up to 1.7 million blocks, and that column generation certifies a BFD--LP gap of 2.26\% on the smallest dataset. The experiments further reveal a structural divide in solution quality across datasets, driven by the interaction between operational constraints and each facility's product profile.