Is last-mile delivery only viable in densely populated centres? A preliminary cost-to-serve simulation for online grocery in the UK
| dc.contributor.author | Srai, Jagjit Singh | |
| dc.contributor.author | Settanni, E | |
| dc.contributor.orcid | Srai, Jag [0000-0003-2277-2127] | |
| dc.contributor.orcid | Settanni, Ettore [0000-0001-5174-9423] | |
| dc.date.accessioned | 2019-06-20T14:07:33Z | |
| dc.date.available | 2019-06-20T14:07:33Z | |
| dc.description.abstract | This paper proposes a conceptualisation of the ‘cost-to-serve’ linking the economic viability of last-mile delivery. Specifically, a cost-to-serve model is developed against business-specific indicators, such as share of online sales for a given catchment/geography. The outputs are then discussed in terms of e-commerce penetration and retailer density for the designated catchment/geography. Preliminary evidence is generated by means of computer simulation for a case in online retail of fast moving consumer goods (FMCG) with a focus on the UK. To this purpose a three-stage, pragmatic simulation approach is outlined, using widely available data in order to evaluate alternative last-mile network configurations, and their associated cost-to-serve cost curves. At each stage a sub-model generates, respectively, 1) order-generating locations; 2) basket composition; and 3) last mile delivery cost. Off-the-shelf tools are employed throughout to generate and visualise key analytics, thus facilitating replicability in real-world industrial settings. Results suggest that as well as having cost benefits with increased market penetration and/or increasing the number of drops per journey, as might be predicted, there appears significant potential to narrow the spread of cost variability for a given market penetration by influencing the available locations/time/price options to online customers. The proposed approach can support similar developments besides FMCG, for example in the pharmaceutical industry as direct-to-home medicine delivery becomes a credible option. | |
| dc.identifier.doi | 10.17863/CAM.40867 | |
| dc.identifier.uri | https://www.repository.cam.ac.uk/handle/1810/293755 | |
| dc.language.iso | eng | |
| dc.title | Is last-mile delivery only viable in densely populated centres? A preliminary cost-to-serve simulation for online grocery in the UK | |
| dc.type | Conference Object | |
| dcterms.dateAccepted | 2017-09-28 | |
| pubs.conference-finish-date | 2017-09-29 | |
| pubs.conference-name | 21st Cambridge International Manufacturing Symposium | |
| pubs.conference-start-date | 2017-09-28 | |
| pubs.funder-project-id | Birmingham City Council (35708-233529) | |
| rioxxterms.licenseref.startdate | 2017-09-28 | |
| rioxxterms.licenseref.uri | http://www.rioxx.net/licenses/all-rights-reserved | |
| rioxxterms.type | Conference Paper/Proceeding/Abstract | |
| rioxxterms.version | AM | |
| rioxxterms.versionofrecord | 10.17863/CAM.40867 |
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