Logistics Service Mode Selection for Last Mile Delivery: An Analysis Method Considering Customer Utility and Delivery Service Cost

Abstract

Last mile delivery is an important part in the logistics service process of express enterprises since it can directly contact with the customer and affect customer satisfaction. How to select a suitable logistics service mode for last mile delivery with the objectives of lower delivery service cost and higher customer satisfaction is a noteworthy research topic. In this paper, we focus on the analysis method for logistics service mode selection for last mile delivery considering customer utility and delivery service cost. First, we conduct the market survey of customer needs and discuss the market segmentation, and then we propose a customer utility value calculation model based on utility theory. Next, we propose a delivery quantity prediction method based on the time series prediction and customer selection probability calculation. Furthermore, we construct a cost accounting model to determine the delivery service cost. On this basis, we show the selection of the suitable logistics service mode for last mile delivery according to the analysis results of customer utility and delivery service cost. Finally, we show the feasibility and effectiveness of the proposed method by a case analysis.

Demand Management for Attended Home Delivery – A Literature Review

“…For the express delivery business sector, Li et al (2021) propose a two-dimensional decision matrix to select the most suitable delivery service mode among direct and indirect options. They measure the expected customer utility and calculate the expected cost of delivery service to map different service modes to the decision matrix.…”

A Multi-Objective Site Selection Model Considering Service Utility and Capability Matching in Outsourcing Collaboration Mode

“…Jeon et al elucidated that service quality characteristics affect the continued willingness to use digital healthcare services [18]. The service utility model can also reflect customer satisfaction to increase market share [19][20]. Therefore, manufacturing enterprises can improve their competitiveness by offering advanced manufacturing services based on customer data.…”

Towards Achieving Customer Satisfaction in Last Mile Delivery for E-commerce Sector: A MCDM Approach

“…The use of combined logistics (home delivery + self-pick-up) service modes is recommended for lastmile delivery and to decide the customer's utility based on the applicability and practicability of logistics services. The research method used for this analysis included the use of MCDM approaches such as AHP and TOPSIS [9]. Customer satisfaction is studied regarding parcel lockers to cut out inefficiency in the last mile delivery by carrying out an exploratory study in Sweden, and it was found out that customer acceptance and satisfaction are heavily moderated by ease of use, perceived quality, and convenience perception [10].…”