Mathematical simulation of package delivery optimization using a combination of carriers

TL;DR

This paper presents a simulation-based approach to optimize long-distance package delivery costs for e-commerce, combining multiple carriers and delivery paths, especially benefiting small and mid-sized businesses far from distribution centers.

Contribution

It introduces a novel simulation model integrating various carrier options and flow selection strategies for cost reduction in long-distance e-commerce deliveries.

Findings

Cost optimization achieved through combined carrier routes.

Simulation results show significant cost savings for distant regions.

Proposed model adapts to real company data and diverse delivery scenarios.

Abstract

A variety of goods and services in the contemporary world requires permanent improvement of services e-commerce platform performance. Modern society is so deeply integrated with mail deliveries, purchasing of goods and services online, that makes competition between service and good providers a key selection factor. As long as logistic, timely, and cost-effective delivery plays important part authors decided to analyze possible ways of improvements in the current field, especially for regions distantly located from popular distribution centers. Considering both: fast and lazy delivery the factor of costs is playing an important role for each end-user. Given work proposes a simulation that analyses the current cost of delivery for e-commerce orders in the context of delivery by the Supplier Fleet, World-Wide delivery service fleet, and possible vendor drop-ship and checks of the alternative ways can be used to minimize the costs. The main object of investigation is focused around mid and small businesses living far from big distribution centers (except edge cases like lighthouses, edge rocks with very limited accessibility) but actively using e-commerce solutions for daily activities fulfillment. Authors analyzed and proposed a solution for the problem of cost optimization for packages delivery for long-distance deliveries using a combination of paths delivered by supplier fleets, worldwide and local carriers. Data models and Add-ons of contemporary Enterprise Resource Planning systems were used, and additional development is proposed in the perspective of the flow selection change. The experiment is based on data sources of the United States companies using a wide range of carriers for delivery services and uses the data sources of the real companies; however, it applies repetitive simulations to analyze variances in obtained solutions.