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

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  • Feng Li

    (Department of Information Management and Decision Sciences, School of Business Administration, Northeastern University, Shenyang 110169, China)

  • Zhi-Ping Fan

    (Department of Information Management and Decision Sciences, School of Business Administration, Northeastern University, Shenyang 110169, China
    Key Laboratory of Data Analytics and Optimization for Smart Industry (Northeastern University), Ministry of Education, Shenyang 110819, China)

  • Bing-Bing Cao

    (School of Management, Guangzhou University, Guangzhou 510006, China)

  • Xin Li

    (Department of Information Management and Decision Sciences, School of Business Administration, Northeastern University, Shenyang 110169, China)

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.

Suggested Citation

  • Feng Li & Zhi-Ping Fan & Bing-Bing Cao & Xin Li, 2020. "Logistics Service Mode Selection for Last Mile Delivery: An Analysis Method Considering Customer Utility and Delivery Service Cost," Sustainability, MDPI, vol. 13(1), pages 1-22, December.
    • Handle: RePEc:gam:jsusta:v:13:y:2020:i:1:p:284-:d:470705
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    References listed on IDEAS

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    4. Juan Guillermo Urzúa-Morales & Juan Pedro Sepulveda-Rojas & Miguel Alfaro & Guillermo Fuertes & Rodrigo Ternero & Manuel Vargas, 2020. "Logistic Modeling of the Last Mile: Case Study Santiago, Chile," Sustainability, MDPI, vol. 12(2), pages 1-18, January.
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    8. Luigi Ranieri & Salvatore Digiesi & Bartolomeo Silvestri & Michele Roccotelli, 2018. "A Review of Last Mile Logistics Innovations in an Externalities Cost Reduction Vision," Sustainability, MDPI, vol. 10(3), pages 1-18, March.
    9. Wang, Minxi & Wang, Yajie & Liu, Wei & Ma, Yu & Xiang, Longtao & Yang, Yunqi & Li, Xin, 2021. "How to achieve a win–win scenario between cost and customer satisfaction for cold chain logistics?," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 566(C).
    10. Seung Yoon Ko & Ratna Permata Sari & Muzaffar Makhmudov & Chang Seong Ko, 2020. "Collaboration Model for Service Clustering in Last-Mile Delivery," Sustainability, MDPI, vol. 12(14), pages 1-18, July.
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