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Workforce planning for O2O delivery systems with crowdsourced drivers

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  • Hongyan Dai

    (Central University of Finance and Economics)

  • Peng Liu

    (National University of Singapore)

Abstract

This paper proposes a workforce capacity planning model for online-to-offline (O2O) logistics systems. Three types of workforces with different compensation schemes are considered: in-house drivers, full-time crowdsourced drivers, and part-time crowdsourced drivers. We propose a cost minimization problem to determine the optimal workforce capacity and optimal order allocations, considering the dynamics of incoming demand. We apply a dataset from an O2O platform and our analysis reveals that (1) the capacity plan priority is part-time crowdsourced drivers, followed by full-time crowdsourced drivers and in-house drivers; the order assignment priority is reverse; (2) setting a proper guaranteed minimum order level and using the single service mode for full-time crowdsourced drivers can significantly reduce the rate of unfulfilled orders and total cost; and (3) leveraging the flexibility of the part-time crowdsourced drivers can significantly reduce the unfulfilled orders and total cost. Moreover, customizing the design of these schemes further enhances their potential. We expect these results to shed light on cost control and provide a model for crowd-sourcing which can improve the efficiency of O2O on-demand businesses.

Suggested Citation

  • Hongyan Dai & Peng Liu, 2020. "Workforce planning for O2O delivery systems with crowdsourced drivers," Annals of Operations Research, Springer, vol. 291(1), pages 219-245, August.
    • Handle: RePEc:spr:annopr:v:291:y:2020:i:1:d:10.1007_s10479-019-03135-z
    DOI: 10.1007/s10479-019-03135-z
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    References listed on IDEAS

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    Cited by:

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    3. Dai, Hongyan & Xiao, Qin & Chen, Songlin & Zhou, Weihua, 2023. "Data-driven demand forecast for O2O operations: An adaptive hierarchical incremental approach," International Journal of Production Economics, Elsevier, vol. 259(C).
    4. Marlin W. Ulmer & Alan Erera & Martin Savelsbergh, 2022. "Dynamic service area sizing in urban delivery," OR Spectrum: Quantitative Approaches in Management, Springer;Gesellschaft für Operations Research e.V., vol. 44(3), pages 763-793, September.
    5. Mancini, Simona & Gansterer, Margaretha, 2022. "Bundle generation for last-mile delivery with occasional drivers," Omega, Elsevier, vol. 108(C).
    6. Bathke, Henrik & Hartmann, Evi, 2021. "Accepting a crowdsourced delivery - A choice-based conjoint analysis," Chapters from the Proceedings of the Hamburg International Conference of Logistics (HICL), in: Jahn, Carlos & Kersten, Wolfgang & Ringle, Christian M. (ed.), Adapting to the Future: Maritime and City Logistics in the Context of Digitalization and Sustainability. Proceedings of the Hamburg International Conf, volume 32, pages 65-95, Hamburg University of Technology (TUHH), Institute of Business Logistics and General Management.

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