||Evaluation of the cost of time windows in home delivery applications
||Røpke, Stefan (Logistics & ITS, Department of Transport, Technical University of Denmark, DTU, DK-2800 Kgs. Lyngby, Denmark)
||Technical University of Denmark, DTU, DK-2800 Kgs. Lyngby, Denmark
||This thesis deals with a real-life business-to-consumer home delivery case that
represents a classical example of Vehicle Routing Problem with Time Windows
(VRPTW). There are several trade-o®s that home delivery service providers need
to face when designing their order ful¯llment strategy.
Delivery time windows represent how long the customers have to stay at home
waiting for their delivery. In the attended home delivery case, the customer ser-
vice level is directly a®ected by time windows durations: providing convenient time
windows improves customer's satisfaction. However, o®ering high level of service
by means of tight time windows often results in higher routing costs in terms of
number of vehicles needed, time and mileage. Quantitative research on the last
mile problem and the factors a®ecting the cost of home delivery has been scarce.
The scope of this project is twofold. First, the home delivery problem is in-
troduced and an extensive literature review is presented. After that, the L'EASY
real-life home delivery case study is described and the trade-o®s that exist among
di®erent delivery strategies are examined by means of the following research ques-
tions: (1)How is the routing cost a®ected by the enlargement or shrinkage of time
windows for all customers? (2)What is the e®ect on the routing cost of assigning
di®erent tight time windows to di®erent shares of customers randomly selected?
(3)What is the e®ect on the routing cost of assigning narrow time windows to those
customers living in the biggest Danish cities?
Di®erent scenarios for the L'EASY case study are modeled and solved using
Route Planner, a commercial vehicle routing software from Transvision A/S. It is
concluded that if the company was considering o®ering a tighter time window to
all customers, then the 2-hour time slot represents an appealing alternative. On
the other hand, if the company was considering o®ering a tight time window to a
speci¯c share of customers who place a higher value on their time and may be will-
ing to pay more for a tighter time window, we could recommend di®erent options.
In particular, o®ering a higher level of service to the customers living in one of the
major Danish cities represents a valid alternative.
||Technical University of Denmark (DTU) : Kgs. Lyngby, Denmark
||Vehicle routing, Time windows, Attended home delivery, Last mile logistics
Creation date: 2010-01-06
Update date: 2010-01-28