The price of customer presence in Attended Home Delivery with Customer Availability Profiles

Attended Home Delivery is a last-mile distribution paradigm in which the customer must be present at home to receive the goods in person.In this context, we study a vehicle routing and scheduling problem in which the customers' availability is given as a time-dependent probability profile, and the company incurs a penalty cost proportional to the probability of not finding the customer at home during the selected timeslot for delivery.Using an efficient Mixed-Integer Linear Programming formulation for the problem as a black-box tool and lexicographic optimization procedures, we develop an economic analysis to support the company in exploiting the tradeoff between basic optimization and the possibility of increasing the customer presence probabilities by paying additional costs.Managerial insights are derived from the change in the value and structure of optimal solutions under different budget levels allocated to improving customer availability profiles.