Economic Sustainability in Last-Mile Drone Delivery Problem with Fulfillment Centers: A Mathematical Formulation

This study is motivated by the increasing growth in the competitive e-commerce market where on-line business-to-customer retailers, seeking for cost-efficient and timely delivery services, are persuaded to adopt a drone-based delivery system against the traditional terrestrial one. Recently, the drone-aided delivery services have significantly been eased, thanks to the development of fulfilment centers, as aerial base stations monitoring and arranging back-and-forth drone trips between the fulfilment centers and customers’ sites that also provide the retailers with services such as package handling, restocking, and drone recharge. Obviously, adopting a drone-based delivery system incurs various expenses: besides drone recharge, maintenance, and energy consumption costs, the usage cost for fulfillment centers, namely tariff, should be paid by the retailers to the FC manager. This study aims to address the economic sustainability of a drone-aided delivery system with fulfillment centers and to provide the retailer with an optimal delivery plan maximizing his profit. This could eventually provide a stable platform for new and small-sized business-to-customer retailers trying to survive in such a competitive market and to promote the use of drone fulfillment centers.