This paper investigates the value of flexibility in customer-to-depot assignments in last-mile distribution operations. In current practice, many companies use fixed delivery regions for their fulfillment warehouses. This allows a decomposition of delivery operations by ware- house, thereby simplifying the planning process. However, this approach foregoes some optimization potential, relative to a holistic planning of the delivery operations across the network. In this paper, we assess the value of this flexibility. We first identify and characterize two specific types of benefits, namely a routing benefit and a pooling benefit. We then proceed to quantify these benefits in an extensive numerical study. Our results disentangle how the benefits depend on key environmental parameters. They also show that a flexible customer-to-depot assignment can add significant value in various relevant conditions.

Additional Metadata
Keywords routing, multiple depots, time windows, attended home delivery
Persistent URL hdl.handle.net/1765/116065
Series ERIM Report Series Research in Management
Journal ERIM report series research in management Erasmus Research Institute of Management
Citation
Seifried, K, Agatz, N.A.H, & Fleischmann, M. (2019). On the Benefits of Flexible Customer-to-Depot Assignments in Attended Home Delivery (No. ERS-2019-004-LIS). ERIM report series research in management Erasmus Research Institute of Management. Retrieved from http://hdl.handle.net/1765/116065