Publication: Pricing for delivery time flexibility
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Co-Authors
Savelsbergh, Martin
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NO
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Abstract
We study a variant of the multi-period vehicle routing problem, in which a service provider offers a discount to customers in exchange for delivery flexibility. We establish theoretical properties and empirical insights regarding the intricate and complex relation between the benefit from additional delivery flexibility, the discounts offered to customers to gain additional delivery flexibility, and the likelihood of acceptance of discount offers by customers. Computational experiments, using an exact dynamic programming algorithm show that, depending on the setting, cost savings exceeding 30% can be achieved.
Source
Publisher
Elsevier
Subject
Economics, Engineering, civil
Citation
Has Part
Source
Transportation Research Part B: Methodological
Book Series Title
Edition
DOI
10.1016/j.trb.2020.01.004