Optimization of Rider Scheduling for a Food Delivery Service in O2O Business

Abstract

Services such as Meituan and Uber Eats have revolutionized the way the customer can find and order from restaurants. Numerous independent restaurants are competing for orders placed by customers via online food ordering platforms. Ordering takeout food on smartphone apps has become more and more prevalent in recent years. There are some operational challenges that takeout food service providers have to deal with, e.g., customer demand fluctuates over time and region. In this sense, the service providers sometimes ignore the fact that some riders may be idle in several periods in regions, while, in contrast, there may be a shortage of riders in other situations. In order to address this problem, we introduce a two-stage model to optimize scheduling of riders for instant food deliveries. A service provider platform expectantly schedules the least quantity of riders to deliver within expected arrival time to satisfy customer demand in different regions and time periods. We introduce a two-stage model that adopts the method of mixed-integer programming (MIP), characterize relevant aspects of the scenario, and propose an optimization algorithm for scheduling riders. We also divide the delivery service region and time into smaller parts in terms of granularity. The large neighborhood search algorithm is validated through numerical experiments and is shown to meet the design objectives. Furthermore, this study reveals that the optimization of rider resource is beneficial to reduce overall cost of the delivery. Takeout food service platforms decide scheduling shifts (start time and duration) of the riders to achieve a service level target at minimum cost. Additional sensitivity analyses, such as the tightness of the order time windows associated with the orders and riders’ familiarity with delivery regions, are also discussed