Yekpay Blog

Door-to-Door delivery in Iran - Literature review (2)

Door-to-Door delivery in Iran - Literature review (2)

On modeling door-to-door parcel delivery services in Iran

Literature review

To model a parcel delivery service, two different areas of hub location and vehicle routing problem were integrated as hub location-routing problem (Wasner & Zäpfel, 2004). Aggregating two areas of location and routing appeared by the study of Laporte (1988), which named it the location-routing problem (LRP). LPRs typically present answers for three different questions of managers: the number and location of facilities, the allocation of nodes to the facilities, and design of the routes through allocated nodes of the facility (Lopes et al., 2013). The facility can be a hub which works as consolidation, connecting, and switching point between origins and destinations that send their parcels as bundles to achieve economies of scale (Zanjirani-Farahani et al., 2013).
The first mathematical formulation and solution method for hub location problem was developed by O’Kelly (1986a, 1986b). Campbell (1994) presented several classical location problems in hub location problem format. Ernst and Krishnamoorthy (1996) formulated hub location of Australian Post as a new linear integer programming model. They introduced a solution method based simulated annealing which was able to solve the large problem with 200 nodes and 10 hubs. Bruns et al. (2000) proposed a discrete location model for restructuring Swiss parcel delivery services to improve the competitiveness of the Swiss Post.

Considering parcel delivery services of Turkey, Kara and Tansel (2001) proposed the problem of last arrival hub location problem in which unavoidable waiting times can occur at hubs because of lack of synchronization of arriving and departing vehicles. In their work, each hub could handle pickup and delivery of some nodes through paths in which vehicles do not end at the departure point of hubs. Although they did not mention to routing part, their study was similar to hub location-routing; LRP is broad enough to include all types of vehicle distribution considerations, either routes or paths (Lopes et al., 2013).
Wasner and Zäpfel (2004) considered a parcel delivery problem and proposed a model for Austria postal system. In their model, vehicles perform both deliveries and pickups, and all inter-hub flows are carried out by a central hub. The problem was defined as to determine the location of depots and hubs, to allocate the customers and postal zones to service areas, and to establish the delivery routes. The authors presented mixed-integer nonlinear programming (MINLP) formulation and a hierarchal heuristic algorithm to solve the problem. Tan and Kara (2007) determined the constraints, requirements, and criteria of the hub location problem, especially for cargo delivery problems. They present integer programming formulations and large-scale implementations of the models within Turkey. Yaman et al. (2007) concentrated on the service structure of cargo delivery companies and proposed a minimax model that focuses on the minimization of the arrival time of the last item. They introduced a new variant of last arrival hub location problem which allows multiple stopovers for the delivery firms of Turkey. Comprehensive reviews of the location-routing models and their applications are provided by Laporte (1988), Min et al. (1998), Nagy and Salhi (2007), and Lopes et al. (2013).

Recently, Karaoglan et al. (2012) proposed two polynomial Mixed-Integer Linear Programming (MILP) formulations for the LRP with simultaneous pickup and delivery. The first formulation was a node-base, while the second one was a flow-based. They proposed a two-phase heuristic algorithm based on simulated annealing to solve the large-sized problems, and two initialization heuristics to generate an initial solution. Čupić and Teodorović (2014) presented a multi-objective approach for solving a parcel delivery hub location problem. They considered two conflict objectives of maximizing profit and maximizing service level and solved the model based on compromise programming and genetic algorithm and implemented the method on a relatively small network with 16 nodes in Serbia. Estrada-Romeu and Robusté (2015) considered hub location problem with the stopover to identify if consolidation strategies were cost-efficient in less-than-truckload systems similar to parcel delivery services. They took the spatial distribution of shipment loads among centers into account for the proximity criterion. The output showed that the proposed methodology might reduce up to 20% the transportation costs. In Table 1 related literature is briefly overviewed.

Door-to-Door delivery 01

Read More

Ref: Farzad Bahrami, Hossein Safari, Reza Tavakkoli-Moghaddam, Mohammad Modarres Yazdi - Iranian Journal of Management Studies (IJMS) - Vol. 9, No. 4, Autumn 2016- pp. 883-906