A tactical time slot management problem under mixed logit demand

Abstract: The growth of e-commerce has led to an increase in home delivery requests, including those for attended home deliveries on subscription-based platforms. To accommodate customer availability, many online retailers offer various delivery time slots. This paper introduces a tactical time slot management problem for subscription-based e-retailers, focusing on slot assortment and price discounts. The novelty of our model lies in incorporating customers' heterogeneous preferences regarding delivery slots, captured through a mixed logit choice model. The resulting stochastic problem is formulated as a mixed-integer linear programming relying on simulations. We utilize a simulation-based adaptive large neighborhood search to solve this problem efficiently for large instances. Numerical experiments demonstrate the effectiveness of our approach, particularly in addressing uncertain heterogeneous customer behavior when optimizing assortment and pricing strategies.