Location Optimization for Community Smart Parcel Lockers Based on Bilevel Programming

Abstract

With the rapid development of e-commerce and the dramatic upsurge in direct-to-consumer deliveries, the last-mile problem has become increasingly apparent. With the distinct advantages of bringing economies of scale and providing 24/7 contactless self-service, smart parcel lockers play a critical role in solving the last-mile problem. However, due to a lack of planning, myopia expansion, and an ambiguous profit model, smart parcel locker suppliers in China have been suffering huge economic losses, restricting their further development. In the study, on the basis of an in-depth analysis of the cost elements and major revenue sources of smart parcel lockers, we propose a bilevel programming model to optimize the location of community smart parcel lockers with the upper-level model maximizing the profit of a third-party smart parcel locker supplier and the lower-level model maximizing user satisfaction. Then, a solution algorithm based on the genetic algorithm is proposed. Finally, some numerical experiments are carried out based on a medium-scale residential community in Jiading District, Shanghai. The sensitivity analyses conducted in this study reveal how the user satisfaction evaluation and the investment budget influence the expected profit. The modelling framework and numerical results can provide third-party smart parcel locker suppliers with significant theoretical support and practical guidance on planning the investment budget and optimizing the smart parcel locker locations to maximize their profit.