Profit-maximizing parcel locker location problem under threshold Luce model

The growth of e-commerce has created increasing complexity in logistics services. To remain competitive, and companies are exploring new modes as supplements to traditional home delivery, one which is the self-service parcel locker. This paper studies a locker location problem where company plans introduce service by locating facilities attract customers. objective maximize profit, accounting for revenue cost facilities, under competition other delivery modes. estimate revenue, we use threshold Luce model (TLM) predict customers’ likelihood using service. We then propose combinatorial optimization develop exact solution methodologies that practically implementable according our extensive computational experiments. In effect, modeling framework generalizes facility problems based on binomial logit (BNL) multinomial (MNL), both impose strong strict assumptions customer’s choice sets. That is, they assume set will either contain only or all facilities. numerical experiment, demonstrate BNL MNL could lead to, respectively, pessimistic optimistic estimation. Consequently, suggested decisions be conservative aggressive. Our proposed model, contrast, can effectively relax these assumptions. results also reveal aggressive decision due incur an unnecessarily high cannot compensated additional leading profit loss significant various scenarios. Finally, conduct sensitivity analysis shed light how relative attraction services (compared options) affects highlight importance calibrating input parameters TLM. • Propose location. Employ with dominance restriction forecast control customer choices. Develop algorithm conic formulation strengthened specialized path-based inequalities. Demonstrate mitigate drawbacks models improve profit. Conduct customers