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Delivery Strategies for Online Customers Considering Delivery Cost and Customer Satisfaction

Azadiamin, Sanam
http://orcid.org/0000-0003-0774-3993
http://rave.ohiolink.edu/etdc/view?acc_num=ohiou1628791445965718

Abstract Details

2021, Doctor of Philosophy (PhD), Ohio University, Industrial and Systems Engineering (Engineering and Technology).
Online grocery shopping is one of the trends that became popular especially during pandemic when customers preferred to not be physically present in the stores. Many grocery stores provide the option for customers to order their products online and have them delivered to their locations. Managing the operations necessary to deliver the orders creates many new issues for the stores. There are two main factors to consider when evaluating how to provide the delivery service: minimizing the delivery cost to remain competitive with other stores and minimizing the waiting time for customers to receive their orders to maintain customer satisfaction. These factors have some commonality, in that efficient delivery routes can reduce both costs and customer waiting time. The first part of this dissertation presents a methodology for considering both cost and customer waiting time when planning delivery of grocery orders. The methodology considers customers’ locations, orders’ preparation time and the number of available vehicles in the store. First, it develops the method for calculating the network driving time between all locations. Then, it uses an integer programming model to develop the delivery routes. Different batching strategies are evaluated to determine whether it is preferable to dispatch vehicles quickly or to allow orders to accumulate and produce more efficient routes. Different heuristics are developed to apply these strategies on group of customers. In the second part of the research, a genetic algorithm is developed to apply on larger numbers of customers and develop the routes more quickly. The testing is performed on different customer groups by considering different operational conditions. The result of this testing is used to analyze the effect of factors like order arrival rate and the number of orders in each delivery on average driving time and average waiting time. The final part of this research applies a profit optimization model. The model uses the data produced from the genetic algorithm application in previous section to estimate the percent of the customers who place an order considering the waiting time. The profit model determines the optimal number of drivers and the area the store should serve to maximize the profit in different operational conditions. The model is tested for different numbers of orders and numbers of drivers in each delivery team. The results show that as the number of orders in each delivery and the order arrival rate increase, the profit increases. The results also indicate the importance of cost and margin on profit. Changing these parameters can change the required number of drivers and change the profit. This research shows that there is a tradeoff between driving time and waiting time considering the batch size as a control factor. Mean customer waiting time is minimized if each order is delivered as soon as it is ready, but this leads to inefficient routes. The most efficient routes can be generated by waiting to receive all of a day’s orders when generating routes, but this will leave some customers waiting a long time before their order leaves the store.
Dale Masel (Advisor)
Tao Yuan (Committee Member)
Saeed Ghanbartehrani (Committee Member)
Vardges Melkonian (Committee Member)
Mohammed Khurrum Bhutta (Committee Member)
184 p.
Industrial Engineering; Information Technology; Management; Transportation Planning
Grocery Delivery Problem; Delivery strategies; Delivery cost; Customer satisfaction; Driving time; Waiting time; Road network data; Heuristics; Genetic algorithm; Profit optimization

Recommended Citations

Citations

  • Azadiamin, S. (2021). Delivery Strategies for Online Customers Considering Delivery Cost and Customer Satisfaction [Doctoral dissertation, Ohio University]. OhioLINK Electronic Theses and Dissertations Center. http://rave.ohiolink.edu/etdc/view?acc_num=ohiou1628791445965718

    APA Style (7th edition)

  • Azadiamin, Sanam. Delivery Strategies for Online Customers Considering Delivery Cost and Customer Satisfaction. 2021. Ohio University, Doctoral dissertation. OhioLINK Electronic Theses and Dissertations Center, http://rave.ohiolink.edu/etdc/view?acc_num=ohiou1628791445965718.

    MLA Style (8th edition)

  • Azadiamin, Sanam. "Delivery Strategies for Online Customers Considering Delivery Cost and Customer Satisfaction." Doctoral dissertation, Ohio University, 2021. http://rave.ohiolink.edu/etdc/view?acc_num=ohiou1628791445965718

    Chicago Manual of Style (17th edition)

ohiou1628791445965718
17
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This open access ETD is published by Ohio University and OhioLINK.