On the Benefits of Flexible Customer-to-Depot Assignments in Attended Home Delivery

25 Pages Posted: 3 May 2019

See all articles by Kilian Seifried

Kilian Seifried

University of Mannheim

Niels Agatz

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM)

Moritz Fleischmann

University of Mannheim, Business School

Date Written: April 30, 2019

Abstract

This paper investigates the value of flexibility in customer-to-depot assignments in last-mile distribution operations. In current practice, many companies use fixed delivery regions for their fulfillment warehouses. This allows a decomposition of delivery operations by ware- house, thereby simplifying the planning process. However, this approach foregoes some optimization potential, relative to a holistic planning of the delivery operations across the network.

In this paper, we assess the value of this flexibility. We first identify and characterize two specific types of benefits, namely a routing benefit and a pooling benefit. We then proceed to quantify these benefits in an extensive numerical study. Our results disentangle how the benefits depend on key environmental parameters. They also show that a flexible customer-to-depot assignment can add significant value in various relevant conditions.

Keywords: routing, multiple depots, time windows, attended home delivery

Suggested Citation

Seifried, Kilian and Agatz, Niels A.H. and Fleischmann, Moritz, On the Benefits of Flexible Customer-to-Depot Assignments in Attended Home Delivery (April 30, 2019). ERIM Report Series . Available at SSRN: https://ssrn.com/abstract=3381075 or http://dx.doi.org/10.2139/ssrn.3381075

Kilian Seifried

University of Mannheim ( email )

Universitaetsbibliothek Mannheim
Zeitschriftenabteilung
Mannheim, 68131
Germany

Niels A.H. Agatz (Contact Author)

Erasmus University Rotterdam (EUR) - Rotterdam School of Management (RSM) ( email )

P.O. Box 1738
Room T08-21
3000 DR Rotterdam, 3000 DR
Netherlands

Moritz Fleischmann

University of Mannheim, Business School ( email )

University of Mannheim
P.O. Box 10 34 62
Mannheim, 68131
Germany

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