Flexible Delivery Routing for Elastic Logistics: A Model and an Algorithm

In this study, we present a flexible delivery routing problem faced by logistics service providers in which some customers may receive their packages indirectly. Customers are supposed to get their packages directly from a delivery service provider or be delivered to indirectly using a nearby station drop and a subsequent separate last-mile delivery service provider that finally delivers their goods. We address the problem of determining whether deliveries to customers should be fulfilled directly or indirectly in this situation. We present the mathematical programming model and propose a near-optimal heuristic approach based on a memetic algorithm. In addition, we evaluate the numerical performance of the proposed algorithm and perform various parametric analyses to gain managerial insights from the model.