Service Network Design for Same-Day Delivery with Hub Capacity Constraints

Abstract

We study a new service network design problem for an urban same-day delivery system in which the number of vehicles that can simultaneously load or unload at a hub is limited. Due to the presence of both time constraints for the commodities and capacity constraints at the hubs, it is no longer guaranteed that a feasible solution exists. The problem can be modeled on a time-expanded network and formulated as an integer program. To be able to solve real-world instances, we design and implement three heuristics: (1) an integer programming–based heuristic, (2) a metaheuristic, and (3) a hybrid matheuristic. An extensive computational study using real-world instances (with different geographies, market sizes, and service offerings) from one of China’s leading comprehensive express logistics service providers demonstrates the efficacy of the three heuristics. Supplemental Material: The online appendix is available at https://doi.org/10.1287/trsc.2022.1155 .