Quantifying the Use of Smart Parcel Station Network as a Solution to the Logistics Last Mile Problem

The last mile delivery term is used to express the last part of the supply chain. Numerous amounts of research and studies focused on the supply chain design and operation and its development, including several processes of the supply, warehouse, inventory, and deliveries, the latter typically performed by companies without integration with the client. However, few are concerned with enhancing the last mile delivery part in a detailed description that involves the client willingness to be part of the supply chain. In such a direction, this work considers the Parcel Locker Stations, which is a self-collection delivery method as a resolution to the problems associated with the last-mile delivery. This research aims to provide the logistics courier with a planning and optimization tool by striking an optimum balance that aims to maximize two critical factors, namely the logistics company profits as well as customer satisfaction levels. The model provides a tool for the logistics management of the couriers to take strategic decisions in selecting the appropriate locations of the parcel stations, tactical decisions represented by the stations' capacity, and operational decisions such as allocating the surplus parcels to the nearest available station. This work examines the model through a case study in Doha, Qatar in terms of couriers' overall profits and the customers’ satisfaction levels. The problem uses (MILP) mixed-integer linear programming to select the lockers' sites in a particular size network by solving it using OPL CPLEX to achieve more realistic and accurate results.