Abstract
The crowd logistics platforms connect stochastic demand with uncertain delivery supply which is provided by independent service providers. Considering direct-network effects and cross-network effects between the demand and supply side, a dynamic surge pricing model for crowd logistics platforms is built. The pricing strategy is derived to coordinate the supply with demand to equilibrium. Furthermore, the pricing strategy minimizing cumulative delivery orders is analyzed. The numerical simulation results show that the dynamic surge pricing strategies can stimulate the uncertain delivery supply for maximizing platforms’ revenue. And, direct-network effects pose a positive impact on the dynamic surge pricing strategy. In contrast, the cross-network effects have a negative impact on the pricing strategy. However, direct-network effects and cross-network effects negatively influence platforms’ revenue.
Highlights
Crowd logistics platforms outsource last-mile delivery services of electric commerce to a mass of independent service providers
Crowd logistics, which is derived from the crowdsourcing model in which individuals or organizations obtain services from a relatively open and often rapidly evolving network of sharing independent groups [1], has the advantages of optimizing resources’ allocation and increasing distribution services’ efficiency [2, 3]
Surge pricing strategy wherein the price is temporarily raised above the regular price is applied to coordinate uncertain self-scheduling supply when demand exceeds supply at the rush hour by crowd logistics platforms, for instance, Dada crowd logistics platforms. erefore, our study develops a surge pricing model of crowd logistics platforms with stochastic demand and uncertain delivery supply considering network effects based on optimal control theory
Summary
Crowd logistics platforms outsource last-mile delivery services of electric commerce to a mass of independent service providers. Erefore, our study develops a surge pricing model of crowd logistics platforms with stochastic demand and uncertain delivery supply considering network effects based on optimal control theory. The paper analyzes influences of direct- and cross-network effects on surge pricing strategies for crowd logistics platforms. We extend the prior literature on surge pricing [6, 7] to stochastic demand and uncertain supply with network effects, which naturally existed between demand side and supply of crowd logistics platforms. Departing from the existing literature applying probability density function to represent stochastic demand and uncertain supply, we use optimal control theory in order to precisely describe the dynamic trajectory of crowd logistics prices.
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