Pickup and delivery costs: A proposed outsourcing model based on the number of stops

Abstract

The active introduction and modern technologies application in the transport market greatly affect all transport branches and the ways of their business. Availability and mass usage of the internet and web services create a new ambiance of trade through online sales respectively e-commerce. The increase in internet sales has a direct effect on the business of courier companies. The increase in the number of shipments, especially in the B2C (Business-to-consumer) segment, is putting increasing pressure on costs for companies that do pickup and delivery. Companies are trying to adapt their business to the new challenges and conditions that prevail in the transport market through different cost management models. One way to manage costs is to outsourcing costs. This paper proposes a model cost calculation in outsourcing services for pickup and delivery shipments based on the number of stops.

Proposed outsourcing model for pick-up and delivery processes

“…For this reason, the paper deals only with the costing model, while the quality and performance of the first and last phases can be observed in the overall outsourcing contract. As shown in papers [13], [4]:…”

“…Different categories of vehicles produce different costs. According to the paper [13], a coefficient (k) was introduced which shows the category of vehicles in the calculation of outsourcing costs. The definition of vehicle categories is given in Table 1, and according to papers [13], [4].…”

“…To define the model, it is necessary to define an initial coefficient 1 N k equal to 1. The ratio of other defined coefficient costs can be written [13], [4]…”

“…The cost of picking up parcel shipments on the 𝑟 route can be calculated: • 𝑘 (13) After defining the costs by categories and phases, the cost of pick-up and the cost of delivery on the route 𝑟 , can be calculated as follows:…”

“…The outsourcing model through which the calculation of costs is defined based on the number of stops in the pick-up and delivery of shipments is shown in [13]. The authors are not based on the quality of task execution, because that part is separate from the calculation of costs in the first and last phases.…”