Last-mile shared delivery: A discrete sequential packing approach

Abstract

© 2020 INFORMS. We propose a model for optimizing the last-mile delivery of n packages from a distribution center to their final recipients, using a strategy that combines the use of ridesharing platforms (e.g., Uber or Lyft) with traditional in-house van delivery systems. The main objective is to compute the optimal reward offered to private drivers for each of the n packages such that the total expected cost of delivering all packages is minimized. Our technical approach is based on the formulation of a discrete sequential packing problem, in which bundles of packages are picked up from the warehouse at random times during the interval [0, T]. Our theoretical results include both exact and asymptotic (as n→∞) expressions for the expected number of packages that are picked up by time T. They are closely related to the classical Rényi's parking/packing problem. Our proposed framework is scalable with the number of packages.