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Optimization of an E-Commerce Supply Chain: Middle Mile and Last Mile

In: Theory, Algorithms, and Experiments in Applied Optimization

Author

Listed:
  • Maria Luíza Teixeira Santos

    (University of São Paulo, Avenida Trabalhador São-carlense)

  • Franklina Maria Bragion Toledo

    (University of São Paulo, Avenida Trabalhador São-carlense)

  • Mariá Cristina Vasconcelos Nascimento

    (Praça Marechal Eduardo Gomes)

Abstract

The significant growth in e-commerce sales has brought major challenges to logistic activity planning. Although several studies have analyzed the cost of transporting goods, only a few have addressed the multiple layers in logistics distribution. This chapter investigates the order delivery planning problem (middle mile and last mile) inspired by an e-commerce company in Latin America, aiming at reducing transportation costs. First, we model a network where the last mile is through direct delivery. This network is instrumental, for example, when the delivery region has low demand and the customer requires express delivery. A second model considering routing delivery in the last mile is also introduced. A first experiment with the proposed distribution-transportation models presents an analytical investigation considering customers within low-demand regions. This experiment is to assess the trade-off between transportation costs and delivery time. A second experiment involved scenarios in denser regions. The scenarios are divided into three sets: (i) assigning all customers to a distribution center (full assignment), (ii) assigning some customers to a distribution center (partial assignment), and (iii) assigning customers to any distribution center. The results showed that routing delivery significantly reduced transport costs, reaching the mark of 83% in some scenarios compared to direct delivery.

Suggested Citation

  • Maria Luíza Teixeira Santos & Franklina Maria Bragion Toledo & Mariá Cristina Vasconcelos Nascimento, 2025. "Optimization of an E-Commerce Supply Chain: Middle Mile and Last Mile," Springer Optimization and Its Applications, in: Boris Goldengorin (ed.), Theory, Algorithms, and Experiments in Applied Optimization, pages 315-344, Springer.
    • Handle: RePEc:spr:spochp:978-3-031-91357-0_15
    DOI: 10.1007/978-3-031-91357-0_15
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