Matching consumers and stage-stations on community group buying platforms: An approach with hierarchy algorithms

Motivated by the business model called “community group buying” (CGB), which has emerged in China and some countries in Southeast Asia, such as Singapore and Indonesia, we develop algorithms that could help CGB platforms match consumers with stage-stations (the picking up center under the CGB mode). By altering the fundamental design of the existing hierarchy algorithms, improvements are achieved. It is proven that our method has a faster running speed and greater space efficiency. Our algorithms avoid traversal and compress the time complexities of matching a consumer with a stage-station and updating the storage information to O(logM) and O(MlogG), where M is the number of stage-stations and G is that of the platform’s stock-keeping units. Simulation comparisons of our algorithms with the current methods of CGB platforms show that our approaches can effectively reduce delivery costs. An interesting observation of the simulations is worthy of note: Increasing G may incur higher costs since it makes inventories more dispersed and delivery problems more complicated.