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Risk-Based Optimization of Driver Allocation in Urban Last-Mile Delivery

  • Usman Ibrahim
  • , Samhar Alzghaier
  • , Mohammad AlDurgam*
  • *Corresponding author for this work

Research output: Contribution to journalConference articlepeer-review

Abstract

Uncertainty in last-mile delivery complicates day ahead driver staffing. We propose a single-period stochastic optimization model that jointly chooses base (pre-booked) and surge (backup) capacity. The model combines the newsvendor overage / underage tradeoff, dual-sourcing cost differentiation, and exogenously specified risk-based route classes to represent heterogeneous demand. Given counts of high, medium, and low risk routes and unit costs, it computes the cost with the objective of finding the optimal numbers of pre-booked and backup drivers. An illustrative example shows how risk segmentation and dual sourcing shape the optimal mix and quantify the tradeoff between higher upfront staffing and lower shortfall exposure. We use finite convolution formulas for the distribution of total driver demand under independent per route needs, enabling efficient evaluation of expected penalties across candidate staffing plans. The model can be extended to rolling horizon and multi-period settings.

Original languageEnglish
Pages (from-to)372-379
Number of pages8
JournalTransportation Research Procedia
Volume97
DOIs
StatePublished - 2026
Event13th International Conference on Transport Survey Methods, 2026 - Danang, Viet Nam
Duration: 30 Mar 20254 Apr 2025

Bibliographical note

Publisher Copyright:
Copyright © 2026. Published by Elsevier B.V.

Keywords

  • Newsvendor model
  • Risk-based planning
  • Staff allocation
  • Stochastic optimization
  • Urban Last-mile delivery

ASJC Scopus subject areas

  • Transportation

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