On Peapod’s website, a customer creates an order and then selects a time slot for delivery. In order to have sufficient time for order picking, time slots are closed about 10 hours before actual delivery. Peapod uses morning and evening cut-off times. The cut-off time is 8pm on the day before delivery for morning slots and midnight on the day before delivery for evening slots. While a time slot is open, the number of orders that has to be delivered in a zipcode during that time slot is closely monitored. Based on capacity considerations, certain time slots in certain zipcodes may be closed at some point. Closing a time slot at Peapod means labeling it as “sold out” on their website (see Figure 1). Even before capacity limits are reached, Peapod may open and close time slots for certain customer groups to try to balance the number of orders over the different time slots. For example, it might be beneficial to temporarily close a popular time slot (in a certain zipcode) to force the selection of other time slots. Actively influencing time slots selection enables Peapod to improve the cost-effectiveness of their delivery operations. Determining when to close or open any of the available time slots is a huge challenge. Price incentives, i.e., discounts, can also be used to balance demand over time. Peapod offers discounts to encourage the selection of the longer 3.5-hour time slots when appropriate. Issues related to dynamically opening and closing time slots are discussed in Section 4 and issues related to using incentives to balance demand are addressed in Section 5.