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Optimal delivery service strategy for Internet shopping with time-dependent consumer demand

Author

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  • Hsu, Chaug-Ing
  • Li, Hui-Chieh

Abstract

This study attempts to optimize a delivery service strategy for Internet shopping by considering time-dependent consumer demand, demand-supply interaction and consumer socioeconomic characteristics. A nonlinear mathematical programming model is formulated for solving the optimal number and duration of service cycles for discriminating strategy by maximizing profit subject to demand-supply interaction. An example is employed to demonstrate the application of the model. Results suggest that discriminating service strategy is a better strategy in response to time-dependent consumer demand than uniform strategy. Finally, the proposed model is demonstrated to yield more profit than models that do not consider variations in consumer demand or demand-supply interaction.

Suggested Citation

  • Hsu, Chaug-Ing & Li, Hui-Chieh, 2006. "Optimal delivery service strategy for Internet shopping with time-dependent consumer demand," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 42(6), pages 473-497, November.
    • Handle: RePEc:eee:transe:v:42:y:2006:i:6:p:473-497
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    Citations

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    Cited by:

    1. Huang, Yeu-Shiang & Chen, Si-Hen & Ho, Jyh-Wen, 2013. "A study on pricing and delivery strategy for e-retailing systems," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 59(C), pages 71-84.
    2. Xiaolong Guo & Ben Li & Yan Liu & Liang Liang, 2017. "Eliminating the Inconvenience of Carrying: Optimal Pricing of Delivery Service for Retailers," Service Science, INFORMS, vol. 9(3), pages 181-191, September.
    3. Zhang Guoxing & Fang Shuai & Lai Kin Keung, 2015. "Game Analysis in a Dual Channels System with Different Power Structures and Service Provision," Journal of Systems Science and Information, De Gruyter, vol. 3(6), pages 513-524, December.
    4. Jin, Ming & Li, Gang & Cheng, T.C.E., 2018. "Buy online and pick up in-store: Design of the service area," European Journal of Operational Research, Elsevier, vol. 268(2), pages 613-623.
    5. Agatz, Niels A.H. & Fleischmann, Moritz & van Nunen, Jo A.E.E., 2008. "E-fulfillment and multi-channel distribution - A review," European Journal of Operational Research, Elsevier, vol. 187(2), pages 339-356, June.
    6. Li, Hui-Chieh, 2015. "Optimal delivery strategies considering carbon emissions, time-dependent demands and demand–supply interactions," European Journal of Operational Research, Elsevier, vol. 241(3), pages 739-748.
    7. Sarkar, Biswajit & Saren, Sharmila & Wee, Hui-Ming, 2013. "An inventory model with variable demand, component cost and selling price for deteriorating items," Economic Modelling, Elsevier, vol. 30(C), pages 306-310.

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