Integrated Demand Management and Vehicle Routing Problem in Attended Home Delivery

This thesis presents a comprehensive analysis of Attended Home Delivery (AHD) systems within the rapidly expanding e-commerce sector. The research addresses the need for optimising delivery routes, refining pricing strategies, and enhancing customer satisfaction while improving profitability margins. It introduces a new approach to last-mile logistics by incorporating a partially time-windowed dynamic routing method with forecast orders. This method utilises forecast orders without time constraints, enabling more efficient time slot allocation for real orders. This approach reduces delivery costs and increases order acceptance rates, thereby boosting overall profitability. Building on this concept, the thesis explores the synergy between demand management and vehicle routing with time windows. It proposes an enhanced methodology for estimating opportunity costs and introduces a dynamic slot-combination strategy. These techniques improve displacement cost assessments, informing better decisions regarding delivery charges. The practicality and efficacy of these methodologies are validated through extensive experiments using real-world data, demonstrating that the proposed solutions outperform current state-of-the-art approaches in profitability and delivery efficiency. Furthermore, the research integrates the impact of delivery price changes, resulting from reduced flexibility in available time slots for future customers, into the opportunity cost estimation framework. This integration is crucial for revenue management and dynamic pricing within AHD, addressing the delivery price as a standalone factor in total revenue. The study refines the approximation of opportunity costs and integrates with existing solution approaches in the AHD problem domain, aligning these approaches with current demand management strategies. This thesis offers practical solutions that address the evolving needs of the AHD industry in an increasingly digital marketplace. In summary, this thesis contributes to last-mile logistics by providing innovative, cost-effective solutions for the AHD sector. These solutions address trends in online shopping, offering insights and strategies to navigate the complexities of modern e-commerce logistics. The research combines theoretical innovation with practical application, aiming to optimise delivery systems in the digital age.