A Novel Two-Phase Approach for Optimization of the Last-Mile Delivery Problem with Service Options

Abstract

As the growth of e-commerce continues to accelerate, there is a need for new and innovative strategies in last-mile delivery to meet the changing demands of customers. The main objective of this study is to address this need by optimizing the last-mile delivery problem with service options (LMDPSOs) through a novel two-phase approach that considers various delivery options such as home delivery, self-pickup, and delivery at different prices. This original approach enables simultaneous optimization of the selection of the most appropriate pickup and delivery points and determination of the most efficient vehicle routing. The LMDPSOs reduces overall costs, minimizes environmental impact, and considers customer satisfaction levels by determining the most appropriate trips according to the available service options. This research employs a two-phase methodology for decision making. The first phase determines the value of the proposed locations through a novel multi-criteria decision-making (MCDM) approach that incorporates sustainability criteria. In the second phase, a tailored mathematical model is proposed for vehicle routing with service options. The model is coded in the CPLEXsoftware version 12.6 in various dimensions. We evaluate the potential and advantages of diverse delivery choices, illustrating that aggregating orders at pickup and delivery points can reduce delivery costs and minimize environmental impact. Additionally, this paper directs managers in selecting the most appropriate delivery method for last-mile delivery, considering environmental, social, and economic factors.