An approximate dynamic programming approach to attended home delivery management

Xinan Yang and Arne K. Strauss

European Journal of Operational Research, 2017, vol. 263, issue 3, 935-945

Abstract: We propose a new method of controlling demand through delivery time slot pricing in attended home delivery management with a focus on developing an approach suitable for industry-scale implementation. To this end, we exploit a relatively simple yet effective way of approximating delivery costs by decomposing the overall delivery problem into a collection of smaller, area-specific problems. These cost estimations serve as inputs into an approximate dynamic programming method that provides estimates of the opportunity cost associated with having a customer from a specific area book delivery in a specific time slot. These estimates depend on the area and on the delivery time slot under consideration.

Keywords: E-commerce; Revenue management; Dynamic programming (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (29)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:263:y:2017:i:3:p:935-945

DOI: 10.1016/j.ejor.2017.06.034

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