In this lesson a problem of city transport is solved. A decision making problem deals with city logistic in Pardubice. An idea of the example is focused on a problem sustainable last-mile delivery and it is described in [1].
Decision making problem formulation
Cargo transportation plays an important role in the national and international trade. For improved functioning of a city, efficient and well-planned transport is one crucial fact. The sustainable last-mile delivery is one of the key phases in city logistics. Micro-hubs in cities are new emerging solutions for an easier and viable last-mile delivery process. The important question in smart and modern cities is the determination of the best micro-hub location. The example solves the micro-hub location selection on the basis of a multi criteria decision making methods/techniques [1].
This example aims at solving the micro-hub location selection problem for the last-mile delivery process in Pardubice. The micro-hub should be defined as a location in the territory of the city where the postal network operators should consolidate the shipments and from that location to deliver them to the customers’ addresses by cargo bikes. There are two stages of the delivery process. The first one is the shipment consolidation process of all postal operators, the national and the private ones, at the established micro-hub location. The second one is the last-mile delivery process to the final customers by Cargo Bikes [1].
The micro-hub location selection problem is not so easy task for operators since multiple interrelated criteria affect the decision making process. This is a typical kind of a multi criteria decision making problem since multiple conflicting criteria affect the micro-hub location selection such as area, cargo bike availability, costs, etc. It is important to emphasize that those multiple criteria do not have the same importance in a decision-making process [1].
Definition of a set of alternatives
There are three alternatives that are considered as possible locations for a micro-hub location for the last-mile delivery purpose. Those three possible were selected from the urbanization plan of the city and those possible locations are not utilized by the municipality. It is about ‘Labsky Palouk’ (A1), ‘Hurka‘ (A2) and ‘Nemosicka’ (A3).
Definition of a set of evaluation criteria
For an evaluation of the alternatives a set of criteria was used. The set has five criteria. To select the micro-hub location in Pardubice city are considered these following criteria: C1 is Cycle Distance (in metres), C2 is Area (in square metres), C3 is Cargo Bike Availability (in points), C4 is Costs (in Czech crown) and C5 is Sum of Distances from sorting centre (in kilometres).
The criterion C1 represents optimal routes from the micro-hub to an area in the centre of Pardubice. With regard to minimizing the length of the route and the route recommended for cyclists from the maps provided by the City by Bike Magazine, optimal routes from the micro-hub on the border of the researched area in the centre of Pardubice were determined.
The criterion C2 evaluates the variants in terms of their area with regard to the possibilities of spreading the micro-hub: other services–parcel locker, electric car, etc.; other interested parties – with regard to the possibility of introducing entry restrictions for the examined area; expansion of the micro-hub location area – with regard to the further development of transport, suppression of externalities, costs; etc.
The criterion C3 represents an availability of cargo-bike transport. This transport is one of the promoted alternatives to road transport. However, its main disadvantage is security. The consequences of a cyclist’s collisio’ with a road vehicle are often fatal. Such consequences can only be avoided by separating the infrastructure for road vehicles and bicycles, which leads to high costs. In this way, cities approach alternative solutions, where separate bicycle paths are built on exposed parts, and in other parts bicycle paths are run along local roads with a low level of traffic. The individual routes from the micro-hub to the investigated area were thus evaluated in terms of their guidance along cycle paths, low-traffic roads, or medium-high-traffic roads. The route was divided by meters and the ratio of the route led along the given cycle route/road was multiplied by a coefficient from 1 to 5, where 5 was the rating of the separately led cycle route and the rating 1 for the road with high traffic.
The criterion C4 determines by experts in the field. This is the sum of the costs of providing the necessary needs for the formation and operation of the micro-hub. These include strengthening the area used, building social facilities for employees of micro-hub (toilets, showers), fencing the land for the safety of consignments and employees, and finally, building an electrical connection with regard to charging stations for cargo bikes, electric vehicles, etc. When selecting localities, only those plots of land that are owned by the city of Pardubice were selected.
The criterion C5 evaluates the variants in terms of their distance from the logistics centres of individual carriers, which participate in the distribution of shipments to the examined area of Pardubice. The selection of the participating carriers considered the market share of the carriers and their willingness to participate in a city innovative project. The sum of distances to the micro-hub was thus examined for the carriers Česká pošta s.p., Zásilkovna.cz, PPL CZ s.r.o., DPD group and DACHSER Czech Republic a.s.
On the basis of Lesson 4.3.3 and [1] the real decision making problem is described in the Table 1.
Now, we apply ‘a quantitative’ approach for setting weights of crireria and defining a transformation matrix of alternatives for the decision table (Table 1). The scale from 1 to 10 (10 is the best for you) was used the expert (manager, decision maker) transformation. But we have to keep in mind which criterion is minimalist and maximalist. The minimalistic criteria are C1, C4 and C5; the maximalist criteria are C2 and C3. The result is shown in the Table 2.
For a total evaluation of j-alternative E(Aj) following equation is used
for i is 1, 2, …, 5 and j is 1, 2 and 3; where wi is i-th weight of i-th criterion and evalji is a partial evaluation of j-th alternative for i-th criterion. The total evaluation of alternatives is in the Table 3.
On the basis of the qualitative expert choice the best rated is the alternative A2 ‘Hurka’.
The last-mile delivery process is one of the crucial city logistics issues, managers and traffic engineers must take a lot of effort to make it as efficient and sustainable as possible. Choosing the right micro hub location for the needs of the last-mile delivery is a problem of vital importance and can significantly affect the quality of delivery, operating costs, better organization of delivery in the city, as well as a higher degree of customer satisfaction [1].
The location selection problem has been becoming more and more popular and should have an increasing trend in the future sustainable urban life.
The disadvantage of this method is the high dependence on the expert’s opinion and assessment.
This can be eliminated by using pairwised comparisons methods. One of them is the method of Analytic hierarchy process which will be explained and used in module 4.4.
References
[1] NOVOTNÁ, M, ŠVADLENKA, L, JOVČIĆ S, SIMIĆ, V. 2022. Micro-hub location selection for sustainable last-mile delivery. PLoS ONE, 17(7), e0270926. https://doi.org/10.1371/journal.pone.0270926