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Incentive Schemes for Attended Home Delivery Services

Author

Listed:
  • Ann Melissa Campbell

    (Department of Management Sciences, Tippie College of Business, University of Iowa, Iowa City, Iowa 52242-1994)

  • Martin Savelsbergh

    (Department of Industrial and Systems Engineering, Georgia Institute of Technology, Atlanta, Georgia 30332-0205)

Abstract

Many companies with consumer direct service models, especially grocery delivery services, have found that home delivery poses an enormous logistical challenge because of the unpredictability of demand coupled with strict delivery windows and low profit margin products. In this paper, we examine the use of incentives to influence consumer behavior to reduce delivery costs. We propose optimization models for two forms of incentives and demonstrate their value and impact through simulation studies. We conclude with a presentation of insights resulting from our efforts.

Suggested Citation

  • Ann Melissa Campbell & Martin Savelsbergh, 2006. "Incentive Schemes for Attended Home Delivery Services," Transportation Science, INFORMS, vol. 40(3), pages 327-341, August.
    • Handle: RePEc:inm:ortrsc:v:40:y:2006:i:3:p:327-341
    DOI: 10.1287/trsc.1050.0136
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    References listed on IDEAS

    as
    1. Ann Melissa Campbell & Martin Savelsbergh, 2004. "Efficient Insertion Heuristics for Vehicle Routing and Scheduling Problems," Transportation Science, INFORMS, vol. 38(3), pages 369-378, August.
    2. Ann Melissa Campbell & Martin W. P. Savelsbergh, 2005. "Decision Support for Consumer Direct Grocery Initiatives," Transportation Science, INFORMS, vol. 39(3), pages 313-327, August.
    3. A Larsen & O Madsen & M Solomon, 2002. "Partially dynamic vehicle routing—models and algorithms," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 53(6), pages 637-646, June.
    4. Russell W. Bent & Pascal Van Hentenryck, 2004. "Scenario-Based Planning for Partially Dynamic Vehicle Routing with Stochastic Customers," Operations Research, INFORMS, vol. 52(6), pages 977-987, December.
    Full references (including those not matched with items on IDEAS)

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    Keywords

    home delivery services; vehicle routing;

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