Joint location and pricing optimization of self-service in urban logistics considering customers’ choice behavior

Self-services by widely-deployed stations allow customers to pick up their packages themselves and have great potential to reduce last-mile delivery cost by aggregating spatial demands. An efficient self-service design for the locations of self-service stations and the service price will help to shift customers from the home-delivery service to the cost-effective self-service, thus reducing the vehicle routing cost of the dedicated fleet. This study proposes a comprehensive modeling and optimization framework for the joint self-service station location and service price (SLSP) optimization problem considering customers’ choice behavior and vehicle routing in order to maximize the profit of the logistics service providers in the last-mile delivery system. Logit equilibrium and Wardrop equilibrium conditions are employed to characterize the delivery service choice and route choice behavior of customers. A convex optimization model is developed to capture the distribution of customers opting for home-delivery service and self-services at various locations, who aim to maximize their expected utilities. The authors then formulate the SLSP problem as a mathematical program with complementarity constraints. An active set algorithm is proposed to solve the model effectively. Numerical experiments based on the Nguyen-Dupuis and Sioux Falls networks are conducted to demonstrate the proposed framework and derive managerial insights.

• Record URL:
  • https://doi.org/10.1016/j.tre.2023.103128
• Record URL:
  • http://www.sciencedirect.com/science/article/pii/S1366554523001163
• Availability:
  • Find a library where document is available. Order URL: http://worldcat.org/issn/13665545
• Supplemental Notes:
  • © 2023 Elsevier Ltd. All rights reserved. Abstract reprinted with permission of Elsevier.
• Authors:
  • Zhang, Wenwei
  • Xu, Min
  • 0000-0002-3088-0358
  • Wang, Shuaian
• Publication Date: 2023-6

Language

• English

Media Info

• Media Type: Web
• Features: References;
• Pagination: 103128
• Serial:
  • Transportation Research Part E: Logistics and Transportation Review
  • Volume: 174
  • Issue Number: 0
  • Publisher: Elsevier
  • ISSN: 1366-5545
  • Serial URL: http://www.sciencedirect.com/science/journal/13665545

Subject/Index Terms

• TRT Terms: Customers; Delivery service; Location; Pricing; Stated preferences; Third party logistics providers; Urban areas
• Geographic Terms: Hong Kong (China)
• Subject Areas: Finance; Freight Transportation; Highways; Planning and Forecasting; Safety and Human Factors;

Filing Info

• Accession Number: 01883590
• Record Type: Publication
• Files: TRIS
• Created Date: May 25 2023 5:41PM