Rider Scheduling in Last-Mile Food Delivery: Incorporating the Fluctuating Demand and Show-Up Rate Dynamics

Abstract

In the case of the food delivery business, it is an on-demand service, so when customer demand arises, the platform must be able to respond immediately before the quality of the food deteriorates. Therefore, the platform must have an adequate number of riders to meet the expected demand. Due to the characteristics of the food delivery platform and employees, there are challenges to consider when scheduling and operating employees. The first one is the demand fluctuation. Due to the characteristics of food delivery, demand is concentrated during lunch and dinner hours, and demand for restaurant brand promotions is highly variable. Second one is the riders’ show-up rate dynamics. Unlike traditional scheduling problems, riders tend to show up late rather than at the scheduled time. This study considers the rider scheduling problem through a two-stage mixed-integer stochastic programming, incorporating the above challenges and demand fluctuations. In the first stage, here and-now decisions are made with staffing taking into account the show-up rate of the riders. In the second stage, there is a process of adjusting when demand is determined in the operation stage through wait-and-see decision.