Download or read book Delivery Pricing and Freight Route Optimization Models for Retail and Logistics Operations written by Chinmoy Mohapatra and published by . This book was released on 2018 with total page 536 pages. Available in PDF, EPUB and Kindle. Book excerpt: The growth of e-commerce platforms has created significant challenges and opportunities for retail and logistics firms. Retailers face the challenge of developing new revenue models to gain greater control of their supply chain and attract new consumers. Logistics service providers need efficient operational planning that ensures effective utilization of their valuable resources to provide better service quality and meet customer commitments. This dissertation develops optimization and economic models for three strategic and operational problems that retailers and logistics service providers face: scheduling shipments on a transportation network, deciding a retailer’s subscription pricing policy for free delivery services, and delivery pricing strategies for competing retailers. We first address (in Chapter two) a trip planning problem for freight railroads that entails determining the sequence of trains that each shipment takes to travel from its origin to destination. We formulate the trip planning problem as an integer program and consider several operating policies, the capacity of trains, and coordination requirements between shipments at transshipment points. We propose various modeling, methodological, and algorithmic enhancements to obtain good quality solutions quickly. We apply our solution approaches to real-life test instances and show the effectiveness of our modeling and algorithmic enhancements. In the third chapter, we study the subscription pricing problem for a retailer that offers a membership option for free delivery services. We develop models to understand the benefits, to both firms and consumers, of such free-delivery subscription (FDS) plans compared to the traditional pay-for-delivery (PFD) option, characterize the firm’s optimal FDS policy, and study the effects of product, consumer, and market characteristics on the firm’s profits and consumer surplus. Our analysis of two FDS pricing strategies – a single “Universal” plan or multiple “Tiered” plans with varying subscription fees and free delivery limits – leads to several interesting insights on the drivers and sensitivity of the optimal policy, profits, and market share to model inputs. Using the subscription pricing model and the consumer decision framework developed in Chapter 3, we develop a game-theoretic framework in Chapter 4 to study competition between two retailers who can offer consumers different delivery payment choices. We demonstrate that the firms can avoid aggressive price competition by offering complementary delivery pricing options in a Stackelberg equilibrium. We characterize the equilibrium delivery pricing policies for both retailers as the market, consumer, and product characteristics change and develop interesting insights on the role of different delivery pricing levers