A Framework for Adopting Drones to a Logistics Cargo Operator Network

Abstract

City logistics concern solutions in package movements that face challenges in rapid growth in demand for home deliveries, congestion, and expectations from consumers for sustainable solutions. Providing last mile delivery services with drones is considered a promising solution in literature as a response to the raising challenges in urban areas. In this paper, we propose an innovative framework that allows a logistics operator to design a last mile delivery network. The Network Design Model contains two parts. First, a binary integer linear programming model is presented, allowing the operator to find the optimal location of intermediate facilities. It is a flow model that uses pre-located facilities. Secondly, a sequential framework is presented that considers Facility Assignment, Knapsack Problem, Traveling Salesman Problem, and Vehicle Assignment. The Network Design Model aims to minimize the operating costs measured in delivery duration, vehicle ground time, and number of not-delivered packages. A Monte Carlo Simulation is formulated to assess the impact risk factors, uncertainties, and variation in key network design attributes have on the performance of the network.