Incentive Schemes for Attended Home Delivery Services
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...
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| Published in | Transportation science Vol. 40; no. 3; pp. 327 - 341 |
|---|---|
| Main Authors | , |
| Format | Journal Article |
| Language | English |
| Published |
Linthicum, MD
INFORMS
01.08.2006
Transportation Science & Logistic Society of the Institute for Operations Research and Management Sciences Institute for Operations Research and the Management Sciences |
| Subjects | |
| Online Access | Get full text |
| ISSN | 0041-1655 1526-5447 |
| DOI | 10.1287/trsc.1050.0136 |
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| 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. |
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| AbstractList | 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. Reprinted by permission of the Institute for Operations Research and Management Science (INFORMS) 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. 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. [PUBLICATION 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 =predictability 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. |
| Audience | Academic |
| Author | Campbell, Ann Melissa Savelsbergh, Martin |
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| Cites_doi | 10.1108/09600030110411419 10.1057/palgrave.jors.2601352 10.1287/trsc.1030.0046 10.1007/BF02098289 10.1287/trsc.1040.0105 10.1002/9781118627372 10.1007/BF02022044 10.1007/BF01096763 10.3141/1817-03 10.1287/opre.1040.0124 |
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| Keywords | Incentive Delivery (good) Consumer behavior Vehicle routing problem Transportation home delivery services vehicle routing Modeling Cost lowering Optimization Logistics |
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| SubjectTerms | Analysis Applied sciences Business orders Consumer behavior Cost control Cost incentives Cost reduction Customer services Customers Delivery costs Delivery services Exact sciences and technology Grocery stores Ground, air and sea transportation, marine construction Heuristics Home delivery of goods Home delivery services Incentives Linear programming Logistics Marketing Mathematical models Modeling Motivation Optimization Postal & delivery services Profitability Profits Route optimization Simulation Studies Transport Transport economics Transportation Transportation planning, management and economics vehicle routing Vehicles Vendors |
| Title | Incentive Schemes for Attended Home Delivery Services |
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