IDEAS home Printed from https://ideas.repec.org/a/eee/transe/v195y2025ics1366554524005155.html
   My bibliography  Save this article

Optimizing warehouse space allocation to maximize profit in the postal industry

Author

Listed:
  • Hyder, Jawad
  • Hassini, Elkafi

Abstract

This study develops a model to optimize warehouse space allocation to maximize throughput based on the capabilities of the delivery company. A bounded knapsack model is suggested for strategic customer selection. It integrates the customer’s inputs and the delivery company’s capabilities to determine a subset of customers and the respective volume amounts that need to be selected from each customer to maximize the company’s profit. The aim is to enhance profit by choosing customers with high profitability, considering penalties, and ensuring the total processed volume does not exceed the facility’s capacity. A heuristic method is suggested and tested. This method enables postal organizations to leverage their current assets and procedures to gain an edge in the expanding e-commerce sector. Numerical analyses indicate that the proposed greedy heuristic results in penalty values that are comparable to or lower than those of traditional methods, and it enhances the overall profitability of the postal organization.

Suggested Citation

  • Hyder, Jawad & Hassini, Elkafi, 2025. "Optimizing warehouse space allocation to maximize profit in the postal industry," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 195(C).
    • Handle: RePEc:eee:transe:v:195:y:2025:i:c:s1366554524005155
    DOI: 10.1016/j.tre.2024.103924
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1366554524005155
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.tre.2024.103924?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Ali Aouad & Daniela Saban, 2023. "Online Assortment Optimization for Two-Sided Matching Platforms," Management Science, INFORMS, vol. 69(4), pages 2069-2087, April.
    2. Qiu, Xiaoqiu & Feuerriegel, Stefan & Neumann, Dirk, 2017. "Making the most of fleets: A profit-maximizing multi-vehicle pickup and delivery selection problem," European Journal of Operational Research, Elsevier, vol. 259(1), pages 155-168.
    3. Shintani, Koichi & Imai, Akio & Nishimura, Etsuko & Papadimitriou, Stratos, 2007. "The container shipping network design problem with empty container repositioning," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 43(1), pages 39-59, January.
    4. Lin Zhu & Yue Wu & Honora Smith & Jiabin Luo, 2023. "Optimisation of containerised air cargo forwarding plans considering a hub consolidation process with cargo loading," Journal of the Operational Research Society, Taylor & Francis Journals, vol. 74(3), pages 777-796, March.
    5. Andonov, R. & Poirriez, V. & Rajopadhye, S., 2000. "Unbounded knapsack problem: Dynamic programming revisited," European Journal of Operational Research, Elsevier, vol. 123(2), pages 394-407, June.
    6. Zhong, Yuanguang & Pan, Qi & Xie, Wei & Cheng, T.C.E. & Lin, Xiaogang, 2020. "Pricing and wage strategies for an on-demand service platform with heterogeneous congestion-sensitive customers," International Journal of Production Economics, Elsevier, vol. 230(C).
    7. Junhyeok Lee & Changseong Ko & Ilkyeong Moon, 2024. "E-commerce supply chain network design using on-demand warehousing system under uncertainty," International Journal of Production Research, Taylor & Francis Journals, vol. 62(5), pages 1901-1927, March.
    8. Shi, Ye & Yu, Yugang & Dong, Yuxuan, 2021. "Warehousing platform’s revenue management: A dynamic model of coordinating space allocation for self-use and rent," European Journal of Operational Research, Elsevier, vol. 293(1), pages 167-176.
    9. Alawneh, Fawzat & Zhang, Guoqing, 2018. "Dual-channel warehouse and inventory management with stochastic demand," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 112(C), pages 84-106.
    10. Kaan Unnu & Jennifer Pazour, 2022. "Evaluating on-demand warehousing via dynamic facility location models," IISE Transactions, Taylor & Francis Journals, vol. 54(10), pages 988-1003, July.
    11. Eskandarzadeh, Saman & Fahimnia, Behnam & Hoberg, Kai, 2023. "Adherence to standard operating procedures for improving data quality: An empirical analysis in the postal service industry," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 176(C).
    12. David Pisinger, 2000. "A Minimal Algorithm for the Bounded Knapsack Problem," INFORMS Journal on Computing, INFORMS, vol. 12(1), pages 75-82, February.
    13. Cohen, Raanan, 2018. "How Amazon’s delivery logistics redefined retail supply chains," Journal of Supply Chain Management, Logistics and Procurement, Henry Stewart Publications, vol. 1(1), pages 75-86, June.
    14. Liang, Jinpeng & Ma, Zhongyuan & Wang, Shuang & Liu, Haitao & Tan, Zhijia, 2024. "Dynamic container slot allocation with empty container repositioning under stochastic demand," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 187(C).
    15. Sina Mohri, Seyed & Nassir, Neema & Thompson, Russell G. & Ghaderi, Hadi, 2024. "Last-Mile logistics with on-premises parcel Lockers: Who are the real Beneficiaries?," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 183(C).
    16. Sara Ceschia & Margaretha Gansterer & Simona Mancini & Antonella Meneghetti, 2023. "The on-demand warehousing problem," International Journal of Production Research, Taylor & Francis Journals, vol. 61(10), pages 3152-3170, May.
    17. Ranjbari, Andisheh & Diehl, Caleb & Dalla Chiara, Giacomo & Goodchild, Anne, 2023. "Do parcel lockers reduce delivery times? Evidence from the field," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 172(C).
    18. Chen, Kang & Chen, Dongxu & Sun, Xueshan & Yang, Zhongzhen, 2016. "Container Ocean-transportation System Design with the factors of demand fluctuation and choice inertia of shippers," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 95(C), pages 267-281.
    19. Ye Shi & Xiaolong Guo & Yugang Yu, 2018. "Dynamic warehouse size planning with demand forecast and contract flexibility," International Journal of Production Research, Taylor & Francis Journals, vol. 56(3), pages 1313-1325, February.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Straubert, Christian, 2024. "A continuous approximation location-inventory model with exact inventory costs and nonlinear delivery lead time penalties," International Journal of Production Economics, Elsevier, vol. 268(C).
    2. Jooken, Jorik & Leyman, Pieter & De Causmaecker, Patrick, 2023. "Features for the 0-1 knapsack problem based on inclusionwise maximal solutions," European Journal of Operational Research, Elsevier, vol. 311(1), pages 36-55.
    3. Sina Mohri, Seyed & Ghaderi, Hadi & Van Woensel, Tom & Mohammadi, Mehrdad & Nassir, Neema & Thompson, Russell G., 2024. "Contextualizing alternative delivery points in last mile delivery," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 192(C).
    4. Kar, Sumi & Basu, Kajla & Sarkar, Biswajit, 2023. "Advertisement policy for dual-channel within emissions-controlled flexible production system," Journal of Retailing and Consumer Services, Elsevier, vol. 71(C).
    5. Matsui, Kenji, 2020. "Optimal bargaining timing of a wholesale price for a manufacturer with a retailer in a dual-channel supply chain," European Journal of Operational Research, Elsevier, vol. 287(1), pages 225-236.
    6. De Munck, Thomas & Chevalier, Philippe & Tancrez, Jean-Sébastien, 2023. "Managing priorities on on-demand service platforms with waiting time differentiation," International Journal of Production Economics, Elsevier, vol. 266(C).
    7. Pasquale Avella & Maurizio Boccia & Igor Vasilyev, 2012. "Computational Testing of a Separation Procedure for the Knapsack Set with a Single Continuous Variable," INFORMS Journal on Computing, INFORMS, vol. 24(1), pages 165-171, February.
    8. Anca POPESCU & Adriana TULBURE, 2024. "Revolutionizing Urban Last-Mile Delivery With Automated Parcel Lockers: An Overview," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 33(2), pages 317-327, December.
    9. Mohammed Alnahhal & Bashir Salah & Mohammed Ruzayqat, 2022. "An Efficient Approach to Investigate the Tradeoff between Double Handling and Needed Capacity in Automated Distribution Centers," Sustainability, MDPI, vol. 14(13), pages 1-25, June.
    10. Peng, Xiaoshuai & Zhang, Lele & Thompson, Russell G. & Wang, Kangzhou, 2023. "A three-phase heuristic for last-mile delivery with spatial-temporal consolidation and delivery options," International Journal of Production Economics, Elsevier, vol. 266(C).
    11. Samani, Ali Riahi & Talebian, Ahmadreza & Mishra, Sabyasachee & Golias, Mihalis, 2025. "Evaluating consumer shopping, delivery demands, and last-mile preferences: An integrated MDCEV-HCM approach," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 197(C).
    12. Kundu, Tanmoy & Goh, Mark & Choi, Tsan-Ming, 2025. "Home delivery vs. out-of-home delivery: Syncretic value-based strategies for urban last-mile e-commerce logistics," Transportation Research Part A: Policy and Practice, Elsevier, vol. 193(C).
    13. Guericke, Stefan & Tierney, Kevin, 2015. "Liner shipping cargo allocation with service levels and speed optimization," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 84(C), pages 40-60.
    14. Leonard Heilig & Stefan Voß, 0. "Information systems in seaports: a categorization and overview," Information Technology and Management, Springer, vol. 0, pages 1-23.
    15. Wang, Shuaian & Meng, Qiang & Liu, Zhiyuan, 2013. "Bunker consumption optimization methods in shipping: A critical review and extensions," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 53(C), pages 49-62.
    16. Zheng, Jianfeng & Sun, Zhuo & Zhang, Fangjun, 2016. "Measuring the perceived container leasing prices in liner shipping network design with empty container repositioning," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 94(C), pages 123-140.
    17. Zhu, Shengda & Fu, Xiaowen & Bell, Michael G.H., 2021. "Container shipping line port choice patterns in East Asia the effects of port affiliation and spatial dependence," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 156(C).
    18. Janssen, Larissa & Diabat, Ali & Sauer, Jürgen & Herrmann, Frank, 2018. "A stochastic micro-periodic age-based inventory replenishment policy for perishable goods," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 118(C), pages 445-465.
    19. Liang Chen & Wei-Kun Chen & Mu-Ming Yang & Yu-Hong Dai, 2021. "An exact separation algorithm for unsplittable flow capacitated network design arc-set polyhedron," Journal of Global Optimization, Springer, vol. 81(3), pages 659-689, November.
    20. He, Shan & Dai, Ying & Ma, Zu-Jun, 2023. "To offer or not to offer? The optimal value-insured strategy for crowdsourced delivery platforms," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 173(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:transe:v:195:y:2025:i:c:s1366554524005155. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/600244/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.