Multi-Criteria Time Window Allocation for Attended Home Deliveries

Abstract

Attended home deliveries require that online retailers and customers agree on delivery time windows to avoid expensive delivery failures. By controlling the offered time windows per order request, online retailers can optimise the allocation of delivery capacity. In this, existing approaches focus on short-term financial criteria like maximising revenue from accepted orders. However, other criteria are conceivable: For instance, evenly distributing deliveries across the region can support the retailer’s visibility to enable benefits from branded trucks. Moreover, ensuring favorable offers to customers who are social influencers can increase other customers’ propensity to try the retailer’s service. We propose a flexible multi-criteria approach to time window allocation to combine various business objectives. In particular, we present an optimisation model considering a general model of customer choice. Based on a multicriteria definition of order value, the optimisation controls the allocation of delivery capacity to maximise the value of accepted orders. A comprehensive, empirically grounded computational study demonstrates the effects of letting time window allocation account for multiple criteria.