Maximum Profit Facility Location and Dynamic Resource Allocation for Instant Delivery Logistics

Increasing e-commerce activity, competition for shorter delivery times, and innovations in transportation technologies have pushed the industry toward instant logistics. This paper studies a facility location online demand allocation problem applicable to logistics company expanding offer service using unmanned aerial vehicles or drones. The is decomposed into two stages. During planning stage, facilities are located, product battery capacity allocated. operational customers place orders dynamically real-time decisions made. explores multi-armed bandit framework maximizing cumulative reward realized by subject various constraints compares it with other strategies. provides about 7% more rewards than second-best strategy when tested on standard test instances. A case study based Portland Metro Area showed that bandits can outperform 20%.