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Optimization of Vehicle Routing Problem with Self-pickup-delivery and Option Delivery Locations

Pour Mohammad Reza, Nima | 2025

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  1. Type of Document: Ph.D. Dissertation
  2. Language: Farsi
  3. Document No: 58526 (01)
  4. University: Sharif University of Technology
  5. Department: Industrial Engineering
  6. Advisor(s): Akbari Jokar, Mohammad Reza
  7. Abstract:
  8. With the increasing tendency of consumers to purchase from online stores and the remarkable growth of this industry in recent years, timely and cost-efficient delivery of goods to the final customer has become one of its major challenges. Accordingly, last-mile delivery has attracted significant attention from both researchers and practitioners. This study addresses a vehicle routing problem that considers customers’ ability to pick up their orders from selected centers and their possible presence at different locations within the planning horizon. This thesis aims to enhance customer satisfaction and reduce distribution costs by employing two innovative vehicle routing approaches. The first approach allows customers to collect their orders from nearby facilities such as retail stores or post offices. This option eliminates the constraint of customer availability at a fixed time and can be economically beneficial for customers. However, it alters the total travel distance of the delivery fleet. The second approach introduces vehicle routing with multiple potential customer locations, which increases the flexibility, efficiency, and customer satisfaction of the system. In this case, customers provide their preferred delivery locations and time windows, and the company determines the delivery plan considering both its own and customers’ preferences. Moreover, this thesis adopts a decentralized decision-making approach, in which decision authority is shared between the service provider and the customers as service recipients. Unlike traditional centralized models, where decisions are made solely by the company, decentralization enables e-retailers to be more responsive and adaptive to customer needs. This perspective recognizes customers as active players in the transportation system whose decisions and preferences must be incorporated into the overall decision-making process. Accordingly, a bi-level optimization model is developed, involving two main entities: the leader (e-retailers or logistics companies) and the followers (customers). The leader’s objective is to maximize profit by increasing revenues from logistics services and managing transportation costs while considering customer preferences. Meanwhile, followers aim to optimize their utility functions, typically preferring lower payments even for more distant pickup points. An equilibrium emerges when the company offers different service options under suitable assumptions, and customers respond by selecting among these options based on distance and price. To solve the proposed problem, a mathematical model is developed to optimize the distribution network and support decisions such as service pricing at pickup centers, selection of suitable pickup locations for each customer, determination of delivery time and location, and routing design. Given the computational complexity of obtaining optimal routes, the thesis employs an exact solution method for small instances and a column generation–based heuristic for large-scale problems to achieve high-quality solutions within a reasonable computation time. Overall, this research provides a novel and practical framework for optimizing distribution networks in e-commerce environments. Its findings can support transportation companies and online businesses in designing pricing policies, allocating capacity, and enhancing customer experience
  9. Keywords:
  10. Pickup and Delivery Problem Optimization ; Last Mile Delivery ; Vehicle Routing Problem ; Bilevel Optimization Problems ; Priority Time Windows ; Self-Pickup

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