Designing logistics systems for home delivery in densely populated urban areas

Yixiao Huang, Martin Savelsbergh and Lei Zhao

Transportation Research Part B: Methodological, 2018, vol. 115, issue C, 95-125

Abstract: To deliver to customers in densely populated urban areas, companies often employ a two-echelon logistics system. In a two-echelon logistics system, the starting point for goods to be delivered in the urban area is a fulfillment center or city distribution center. From there, the goods are first transported to a satellite, from where they are delivered to their final destinations. To simplify operations, companies, in practice, often restrict the route choices at one or both of the echelons. We study the impact on the delivery cost of such restrictions and conclude that when the number of orders to be delivered is large and the location density of delivery addresses is high, the impact is likely to be small, and the operational benefits probably outweigh the cost increases. To more easily accommodate delivery volume growth and to more effectively handle day-to-day delivery volume variations, we introduce a simple aggregation concept, which leads to quality improvements without affecting operational simplicity. We provide further insight by means of a worst-case analysis for specific geographic topologies.

Keywords: Megacities; Business-to-consumer e-commerce; City logistics; Two-echelon vehicle routing problem; Delivery strategy (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0191261517307294
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:transb:v:115:y:2018:i:c:p:95-125

Ordering information: This journal article can be ordered from
http://www.elsevier.com/wps/find/supportfaq.cws_home/regional
https://shop.elsevie ... _01_ooc_1&version=01

DOI: 10.1016/j.trb.2018.07.006

Access Statistics for this article

Transportation Research Part B: Methodological is currently edited by Fred Mannering

More articles in Transportation Research Part B: Methodological from Elsevier
Bibliographic data for series maintained by Catherine Liu ().