Optimization of Local Delivery Platforms

Local delivery platforms are collaborative undertakings where local stores offer instant-delivery to local customers ordering their products online. Offering such delivery services both reliably and cost-effectively is one of the main challenges for local delivery platforms as they face a complex, stochastic, dynamic pickup-and-delivery problem. Orders need to be consolidated to increase the efficiency of the delivery operations and thereby enable a high service guarantee towards the customer and stores. But, waiting for consolidation opportunities may jeopardize delivery service reliability in the future, and thus requires anticipating future demand. This project introduces a generic approach to balance the consolidation potential and delivery urgency of orders. Inspired by a motivating application in the city of Groningen, the Netherlands, numerical experiments show that this approach strongly increases perceived customer satisfaction while lowering the total travel time of the vehicles compared to various benchmark policies. It also reduces the percentage of late deliveries, and the extent of their lateness, to a minimum.