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Arne Strauss

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Seminar: Dynamic Pricing of Flexible Time Slots for Attended Home Delivery Services
In e-commerce, customers are usually offered a menu of regular home delivery time windows of which they need to select exactly one. We define a flexible delivery time slot as any combination of such regular time windows (not necessarily adjacent). In selecting a flexible time slot, the customer agrees to be informed only shortly prior to the dispatching of the delivery vehicle in which regular time window (out of the set of windows that form the flexible product) the items will arrive. In return for providing this flexibility, the company offers the customer a reduced delivery charge.
We study dynamic pricing of regular and flexible time slots in this context for attended home delivery. Initial numerical experiments, based on realistically-sized scenarios, indicate that expected profit may increase significantly depending on demand intensity when adding flexible slots rather than using only regular slots.
Oct 2017

ID: 137741552