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An approximate dynamic programming approach to attended home delivery management

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  • Yang, Xinan
  • Strauss, Arne K.

Abstract

We propose a new method of controlling demand through delivery time slot pricing in attended home delivery management with a focus on developing an approach suitable for industry-scale implementation. To this end, we exploit a relatively simple yet effective way of approximating delivery costs by decomposing the overall delivery problem into a collection of smaller, area-specific problems. These cost estimations serve as inputs into an approximate dynamic programming method that provides estimates of the opportunity cost associated with having a customer from a specific area book delivery in a specific time slot. These estimates depend on the area and on the delivery time slot under consideration.

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  • Yang, Xinan & Strauss, Arne K., 2017. "An approximate dynamic programming approach to attended home delivery management," European Journal of Operational Research, Elsevier, vol. 263(3), pages 935-945.
    • Handle: RePEc:eee:ejores:v:263:y:2017:i:3:p:935-945
    DOI: 10.1016/j.ejor.2017.06.034
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    Cited by:

    1. Yuki Oyama & Daisuke Fukuda & Naoto Imura & Katsuhiro Nishinari, 2022. "E-commerce users' preferences for delivery options," Papers 2301.00666, arXiv.org, revised Aug 2023.
    2. Waßmuth, Katrin & Köhler, Charlotte & Agatz, Niels & Fleischmann, Moritz, 2023. "Demand management for attended home delivery—A literature review," European Journal of Operational Research, Elsevier, vol. 311(3), pages 801-815.
    3. Keskin, Merve & Branke, Juergen & Deineko, Vladimir & Strauss, Arne K., 2023. "Dynamic multi-period vehicle routing with touting," European Journal of Operational Research, Elsevier, vol. 310(1), pages 168-184.
    4. Magdalena A. K. Lang & Catherine Cleophas & Jan Fabian Ehmke, 2021. "Anticipative Dynamic Slotting for Attended Home Deliveries," SN Operations Research Forum, Springer, vol. 2(4), pages 1-39, December.
    5. Koch, Sebastian & Klein, Robert, 2020. "Route-based approximate dynamic programming for dynamic pricing in attended home delivery," European Journal of Operational Research, Elsevier, vol. 287(2), pages 633-652.
    6. Srinivas, Sharan & Ramachandiran, Surya & Rajendran, Suchithra, 2022. "Autonomous robot-driven deliveries: A review of recent developments and future directions," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 165(C).
    7. Avraham, Edison & Raviv, Tal, 2021. "The steady-state mobile personnel booking problem," Transportation Research Part B: Methodological, Elsevier, vol. 154(C), pages 266-288.
    8. Mancini, Simona & Gansterer, Margaretha & Triki, Chefi, 2023. "Locker box location planning under uncertainty in demand and capacity availability," Omega, Elsevier, vol. 120(C).
    9. Künnen, Jan-Rasmus & Strauss, Arne K., 2022. "The value of flexible flight-to-route assignments in pre-tactical air traffic management," Transportation Research Part B: Methodological, Elsevier, vol. 160(C), pages 76-96.
    10. 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.
    11. Niels Agatz & Yingjie Fan & Daan Stam, 2021. "The Impact of Green Labels on Time Slot Choice and Operational Sustainability," Production and Operations Management, Production and Operations Management Society, vol. 30(7), pages 2285-2303, July.
    12. Agatz, N.A.H. & Fan, Y. & Stam, D.A., 2020. "Going green: the effect of green labels on delivery time slot choices," ERIM Report Series Research in Management ERS-2020-009-LIS, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    13. Lebedev, Denis & Goulart, Paul & Margellos, Kostas, 2021. "A dynamic programming framework for optimal delivery time slot pricing," European Journal of Operational Research, Elsevier, vol. 292(2), pages 456-468.
    14. van der Hagen, L. & Agatz, N.A.H. & Spliet, R. & Visser, T.R. & Kok, A.L., 2022. "Machine Learning-Based Feasibility Checks for Dynamic Time Slot Management," ERIM Report Series Research in Management ERS-2022-001-LIS, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    15. Zhou, Yizi & Mandania, Rupal & Liu, Jiyin, 2022. "Green vehicle routing and dynamic pricing for scheduling on-site services," International Journal of Production Economics, Elsevier, vol. 254(C).
    16. Bayliss, Christopher & Currie, Christine S.M. & Bennell, Julia A. & Martinez-Sykora, Antonio, 2019. "Dynamic pricing for vehicle ferries: Using packing and simulation to optimize revenues," European Journal of Operational Research, Elsevier, vol. 273(1), pages 288-304.
    17. Marlin W. Ulmer, 2020. "Dynamic Pricing and Routing for Same-Day Delivery," Transportation Science, INFORMS, vol. 54(4), pages 1016-1033, July.
    18. Klein, Vienna & Steinhardt, Claudius, 2023. "Dynamic demand management and online tour planning for same-day delivery," European Journal of Operational Research, Elsevier, vol. 307(2), pages 860-886.
    19. Klein, Robert & Koch, Sebastian & Steinhardt, Claudius & Strauss, Arne K., 2020. "A review of revenue management: Recent generalizations and advances in industry applications," European Journal of Operational Research, Elsevier, vol. 284(2), pages 397-412.
    20. Strauss, Arne & Gülpınar, Nalan & Zheng, Yijun, 2021. "Dynamic pricing of flexible time slots for attended home delivery," European Journal of Operational Research, Elsevier, vol. 294(3), pages 1022-1041.
    21. Lang, Magdalena A.K. & Cleophas, Catherine & Ehmke, Jan Fabian, 2021. "Multi-criteria decision making in dynamic slotting for attended home deliveries," Omega, Elsevier, vol. 102(C).
    22. Fleckenstein, David & Klein, Robert & Steinhardt, Claudius, 2023. "Recent advances in integrating demand management and vehicle routing: A methodological review," European Journal of Operational Research, Elsevier, vol. 306(2), pages 499-518.
    23. Robert Klein & Jochen Mackert & Michael Neugebauer & Claudius Steinhardt, 2018. "A model-based approximation of opportunity cost for dynamic pricing in attended home delivery," OR Spectrum: Quantitative Approaches in Management, Springer;Gesellschaft für Operations Research e.V., vol. 40(4), pages 969-996, October.
    24. Abdollahi, Mohammad & Yang, Xinan & Nasri, Moncef Ilies & Fairbank, Michael, 2023. "Demand management in time-slotted last-mile delivery via dynamic routing with forecast orders," European Journal of Operational Research, Elsevier, vol. 309(2), pages 704-718.
    25. Ulmer, Marlin W. & Thomas, Barrett W., 2020. "Meso-parametric value function approximation for dynamic customer acceptances in delivery routing," European Journal of Operational Research, Elsevier, vol. 285(1), pages 183-195.

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