Concept for a simulation-optimization procedure model for automated parcel lockers as a last-mile delivery scheme: a case study in the city of Dortmund

Purpose of the communication: More than half of the world's population live in urban areas, with the density increasing. Cities require goods and related logistics services, which fact has economic, environmental, and social implications. The usage of automated parcel locker (APL) systems such as packstations or locker boxes is one of the most promising initiatives to improve urban logistics (UL) activities. The APL has electronic locks with variable opening codes and can be used by different consumers, whenever it is convenient for them. Some studies confirm that online shoppers will use APLs more frequently in the future. We develop a procedure model for APL adoption as a last-mile delivery scheme, to reduce the risk of failures in their implementation. A case study in the city of Dortmund is presented. Research design, methodological approach: The procedure model combines a system dynamics simulation model (SDSM) with a facility location problem (FLP) optimization model in a specific case of study. Results obtained: The procedure model includes five main steps to combine an SDSM with an FLP. We use the SDSM to understand the components' behavior of the APL systems in terms of the market size, potential e-customers, APL users, purchases per month, number of deliveries, and the number of APLs. We develop a multi-period capacitated FLP as an optimization model to determine the optimal location of the APLs in every district of Dortmund. The model considers three principal scenarios – pessimistic (S1), realistic (S2), and optimistic (S3) – through a planning horizon of 60 months. The initial results of the number of deliveries (units) at the first month are: 51,381 for S1, 154,147 for S2, and 256,907 for S3; at the 60th month: 224,022 for S1, 672,067 for S2, and 1,120,110 for S3. The number of APLs that the city of Dortmund needs at the first month is: 8 for S1, 24 for S2, and 41 for S3; at the 60th month: 37 for S1, 112 for S2, and 186 for S3. We use the total cost results for applying a standard formulation of the net present value (NPV). The NPV determines the investment needed to implement each scenario. The investment amount in the three proposed scenarios is: 325,300 for S1, 987,600 for S2, and 1,643,900 for S3. Based on these investment amounts, third-party logistics providers could decide to implement APLs as delivery scheme.