A Novel Two-Phase Approach for Optimization of the Last-Mile Delivery Problem with Service Options

Abstract

As the growth of e-commerce continues to accelerate, there is a need for new and innovative strategies in last-mile delivery to meet the changing demands of customers. The main objective of this study is to address this need by optimizing the last-mile delivery problem with service options (LMDPSOs) through a novel two-phase approach that considers various delivery options such as home delivery, self-pickup, and delivery at different prices. This original approach enables simultaneous optimization of the selection of the most appropriate pickup and delivery points and determination of the most efficient vehicle routing. The LMDPSOs reduces overall costs, minimizes environmental impact, and considers customer satisfaction levels by determining the most appropriate trips according to the available service options. This research employs a two-phase methodology for decision making. The first phase determines the value of the proposed locations through a novel multi-criteria decision-making (MCDM) approach that incorporates sustainability criteria. In the second phase, a tailored mathematical model is proposed for vehicle routing with service options. The model is coded in the CPLEXsoftware version 12.6 in various dimensions. We evaluate the potential and advantages of diverse delivery choices, illustrating that aggregating orders at pickup and delivery points can reduce delivery costs and minimize environmental impact. Additionally, this paper directs managers in selecting the most appropriate delivery method for last-mile delivery, considering environmental, social, and economic factors.

Achieving a Sustainable Transportation System via Economic, Environmental, and Social Optimization: A Comprehensive AHP-DEA Approach from the Waste Transportation Sector

“…In fact, traditional transportation planning is primarily concerned with expanding availabilities to meet economic issues. Nonetheless, it overlooked social and environmental challenges such as energy consumption, noise pollution, emissions, energy consumption, ecological damage, waste generation, and road safety [58,59]. Consequently, effective transportation planning which includes route selection is a crucial contributing component in establishing sustainable transportation systems [54].…”

“…Sustainable transportation planning seeks to build flexible and resilient transportation systems that support economic growth, enhance public health, and contribute to a more sustainable urban environment. This is achieved by promoting collaboration among stakeholders and engaging with public regulations [59,60].…”

A Review of Literature on Vehicle Routing Problems of Last-Mile Delivery in Urban Areas

“…Customers provide multiple optional delivery points for pickup along with delivery time windows, and then the delivery plan chooses one of them. This delivery mode can reduce the number of visit locations, mitigate costly detours, and ultimately enhance customer satisfaction while simultaneously minimizing the environmental impact and overall distribution costs [126][127][128][129].…”

“…Table 4 summarizes the literature on optional delivery points. While earlier research does not consider customers' preferences on delivery points [133], more recent papers offer customers a broader array of location choices and consider customers' preferences over the delivery points for route planning [129,132]. All papers in the table consider the capacity limit of the fleet.…”