Capturing the benefits of mobile communication in pre-sell distribution

We address the benefits of utilizing a mobile communication technology in the pre-sell method of goods distribution which engages traveling salesmen to reveal customer demands and quote deliveries prior to their physi- cal execution. This method has recently gained more popularity in the industry as the product variety continues to expand. The mobile technology is commonly recognized as an important enabler for the pre-sell method due to the capability of a real-time information interchange between the field and the back-office. We take a closer look at the economic advantage of the technology adoption in a model-based study. To this end, we consider a model company and capture order quoting performed by its sales employees in terms of a multi-stage stochastic program. Mobile communication is shown to benefit the company by enabling stock sharing between sales territories as well as infor- mation sharing when demands are dependent across territories. Dynamic programming is employed to determine optimal order quoting and to capture the benefit of stock sharing in a number of illustrative examples.