Customer Incentive Rebalancing Plan in Free-Float Bike-Sharing System with Limited Information

Ruijing Wu, Shaoxuan Liu and Zhenyang Shi
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Ruijing Wu: Antai College of Economics and Management, Shanghai Jiao Tong University, Shanghai 200030, China
Shaoxuan Liu: Ningbo Supply Chain Innovation Institute China, MIT Global Supply Chain and Logistics Excellence (SCALE) Network, Ningbo 315000, China
Zhenyang Shi: Antai College of Economics and Management, Shanghai Jiao Tong University, Shanghai 200030, China

Sustainability, 2019, vol. 11, issue 11, 1-24

Abstract: Free-float bike-sharing (FFBS) systems have increased in popularity as a sustainable travel mode in recent years, especially in the urban areas of China. Despite the convenience such systems offer to customers, it is not easy to maintain an effective balance in the distribution of bikes. This study considers the dynamic rebalancing problem for FFBS systems, whereby user-based tactics are employed by incentivizing users to perform repositioning activities. Motivated by the fact that the problem is frequently faced by FFBS system operators entering a new market with limited information on travel demand, we adopt the ranking and selection approach to select the optimal incentive plan. We describe the system dynamics in detail, and formulate a profit maximization problem with a constraint on customer service level. Through numerical studies, we first establish that our procedure can select the optimal incentive plan in a wide range of scenarios. Second, under our incentive plan, the profit and service level can be improved significantly compared with the scenario without incentive provision. Third, in most cases, our procedure can achieve the optimal solution with a reasonable sample size.

Keywords: free-float bike-sharing; customer incentive-based rebalancing; simulation optimization; ranking and selection (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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