A contextual framework for learning routing experiences in last-mile delivery

This paper presents a contextual framework for solving the experience-driven traveling salesman problem in last-mile delivery. The objective of the framework is to generate routes similar to historic high-quality ones as classified by operational experts by considering the unstructured and complex features of the last-mile delivery operations. The framework involves learning a transition weight matrix and using it in a TSP solver to generate high quality routes. In order to learn this matrix, we use descriptive analytics to extract and select important features of the high-quality routes from the data. We present a rule-based method using such extracted features. We then introduce a factorization of the transition weight matrix by features, which reduces the dimensions of the information to be learned. In the predictive analytics stage, we develop (1) Score Guided Coordinate Search as a derivative-free optimization algorithm, and (2) label-guided methods inspired by supervised learning algorithms for learning the routing preferences from the data. Any hidden preferences that are not obtained in the descriptive analytics are captured at this stage. Our approach allows us to blend the advantages of different facets of data science in a single collaborative framework, which is effective in generating high-quality solutions for a last-mile delivery problem. We test the efficiency of the methods using a case study based on Amazon Last-Mile Routing Challenge organized in 2021. A preliminary version of our rule-based method received the third place and a $25,000 award in the challenge. In this paper, we improve the learning performance of our previous methods through predictive analytics, while ensuring that the methods are effective, interpretable and flexible. Our best performing algorithm improves the performance of our rule-based method on an out-of-sample testing dataset by more than 23.1%. • Introduced an experience-driven framework for last-mile delivery route optimization. • Developed methods to learn and optimize a factorized transition weight matrix. • Proposed Score Guided Coordinate Search, a novel derivative-free optimization method. • Blended rule-based and data-driven approaches to improve performance by 23.1%. • Validated the framework using the Amazon Last-Mile Routing Challenge case study.