Optimizing Parcel Locker Locations with Pricing Decisions in Last-Mile Delivery

AbstractThe parcel locker is a new last-mile delivery concept that provides outdoor delivery of commercial goods. In recent years, determining the parcel locker locations has become critical in the literature to provide an effective locker service to the customer. Accordingly, this study aims to optimize the parcel locker locations with effective pricing decisions for the locker service. We use a price-response function to determine the price of the locker service in the customer layers. We generate new benchmark problems to evaluate the performance of the mathematical modeling approach. The computational results indicate that the price-response function is effective in determining the price of the locker service, and the proposed mathematical model, having introduced customer layers, gives promising results for future studies on combining the optimization of parcel locker location decisions and pricing widely applied in revenue management practices.KeywordsLast-mile deliveryParcel lockerPricingRevenue managementOptimization