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Integrating collection-and-delivery points in the strategic design of urban last-mile e-commerce distribution networks

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  • Janjevic, Milena
  • Winkenbach, Matthias
  • Merchán, Daniel

Abstract

The use of collection-and-delivery points (CDPs) within multi-echelon distribution networks is becoming an increasingly popular last-mile distribution strategy. In this work, we provide a method to integrate CDPs in the design of multi-echelon distribution networks. We formulate a non-linear optimization model that includes CDP location decisions and accounts for changes in demand patters occurring with their placement. To enable its application to large-scale problem instances, we formulate extended routing cost approximation formulae. We then propose a heuristic solution method and apply the model and solution approach to a real-world case study of last-mile distribution by a major Brazilian e-commerce player.

Suggested Citation

  • Janjevic, Milena & Winkenbach, Matthias & Merchán, Daniel, 2019. "Integrating collection-and-delivery points in the strategic design of urban last-mile e-commerce distribution networks," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 131(C), pages 37-67.
    • Handle: RePEc:eee:transe:v:131:y:2019:i:c:p:37-67
    DOI: 10.1016/j.tre.2019.09.001
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