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A Two-Stage Stochastic Optimisation Model for Urban Same-Day Delivery with Micro-hubs

In: Operations Research Proceedings 2022

Author

Listed:
  • Charlotte Ackva

    (Otto von Guericke Universität Magdeburg)

Abstract

To compete with the rapid growth in e-commerce, many local shops provide a delivery service to their customers. To increase consolidation opportunities, shops start cooperating in local delivery by using shared vehicles and micro-hubs for joint transportation of parcels. Stores deposit their orders at close-by micro-hubs for further delivery by the shared vehicles, which conduct consistent routes between the micro-hubs. As long as it is in line with their schedule, the vehicles collect the parcels and drop them off close to customers’ locations. Hence, it is very important to find effective schedules which is particularly challenging since order placements vary from day to day. We propose a two-stage stochastic program. In the first stage, the vehicle schedules are determined. In the second stage, the realised orders are routed. The goal is to maximise the expected amount of fulfilled parcel orders with the shared vehicles. We solve the problem with the Progressive Hedging algorithm. We consider the optimal solution without consistency constraints and a practically-inspired heuristic solution as benchmarks. We find that Progressive Hedging behaves rather poorly on random data, but performs particularly well on highly structured demand patterns.

Suggested Citation

  • Charlotte Ackva, 2023. "A Two-Stage Stochastic Optimisation Model for Urban Same-Day Delivery with Micro-hubs," Lecture Notes in Operations Research, in: Oliver Grothe & Stefan Nickel & Steffen Rebennack & Oliver Stein (ed.), Operations Research Proceedings 2022, chapter 0, pages 3-9, Springer.
    • Handle: RePEc:spr:lnopch:978-3-031-24907-5_1
    DOI: 10.1007/978-3-031-24907-5_1
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