Optimal delivery service strategy for Internet shopping with time-dependent consumer demand

Abstract

This study attempts to optimize a delivery service strategy for Internet shopping by considering time-dependent consumer demand, demand-supply interaction and consumer socioeconomic characteristics. A nonlinear mathematical programming model is formulated for solving the optimal number and duration of service cycles for discriminating strategy by maximizing profit subject to demand-supply interaction. An example is employed to demonstrate the application of the model. Results suggest that discriminating service strategy is a better strategy in response to time-dependent consumer demand than uniform strategy. Finally, the proposed model is demonstrated to yield more profit than models that do not consider variations in consumer demand or demand-supply interaction. (c) 2005 Elsevier Ltd. All rights reserved.