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The value of stochastic crowd resources and strategic location of mini-depots for last-mile delivery: A Benders decomposition approach

Author

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  • Nieto-Isaza, Santiago
  • Fontaine, Pirmin
  • Minner, Stefan

Abstract

Crowd-shipping is an emergent solution to avoid the negative effects caused by the growing demand for last-mile delivery services. Previous research has studied crowd-shipping typically at an operational planning level. However, the study of support infrastructure within a city logistics framework has been neglected, especially from a strategic perspective. We investigate a crowd-sourced last-mile parcel delivery system supported by a network of strategically located mini-depots and present a two-stage stochastic network design problem with stochastic time-dependent arc capacity to fulfill stochastic express deliveries. The first-stage decision is the location of mini-depots used for decoupling flows allowing more flexibility for crowd–demand matching. The second stage of the problem is the demand allocation of crowd carriers or professional couriers for a finite set of scenarios. We propose an exact Benders decomposition algorithm embedded in a branch-and-cut framework. To enhance the algorithm, we use partial Benders decomposition, warm-start, and non-dominated cuts. We perform computational experiments on networks inspired by the public transportation network of Munich. The proposed solution method outperforms an off-the-shelf solver by solving instances 3.6 to 19 times faster. The results show the potential to exploit the stochastic crowd flows to deliver packages with deadlines of 3 or 8 h. The crowd can transport 8.3% to 32.5% of the total demand by using between 4% to 24% of the crowd capacity, and we observe average daily savings of 2.1% to 7.6% of the total expected operational cost. The results show values of the stochastic solution of at least 1% and up to 10%.

Suggested Citation

  • Nieto-Isaza, Santiago & Fontaine, Pirmin & Minner, Stefan, 2022. "The value of stochastic crowd resources and strategic location of mini-depots for last-mile delivery: A Benders decomposition approach," Transportation Research Part B: Methodological, Elsevier, vol. 157(C), pages 62-79.
    • Handle: RePEc:eee:transb:v:157:y:2022:i:c:p:62-79
    DOI: 10.1016/j.trb.2021.12.014
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    References listed on IDEAS

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    3. Wang, Li & Xu, Min & Qin, Hu, 2023. "Joint optimization of parcel allocation and crowd routing for crowdsourced last-mile delivery," Transportation Research Part B: Methodological, Elsevier, vol. 171(C), pages 111-135.

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