Implications of matching and pricing strategies for multiple-delivery-points service in a freight O2O platform

Abstract A multiple-delivery-points service that matches a vehicle to distribute goods from a merchant to multiple retailers is a novel and important business model in freight O2O platforms. Thus far, the distribution matching strategy that does not consider the pricing strategy has found wide use in practice. In this study, using mixed integer linear programming, we propose an assignment matching strategy that jointly optimizes the matching and pricing strategies with optimal delivery routes to multiple retailers. Based on practical data from Zallsoon, a famous freight O2O platform in China, the results show that the proposed assignment matching strategy has the potential to improve the pickup distance by 75–81.81%. Further, the choice of pricing strategies could contribute 60–93.33% in improvements to the transportation cost for cities with various order structures and promotion levels. Finally, the high starting fare and low extra charge rate strategy is preferred for high-tier cities, whereas the step toll strategy is recommended for low-tier cities.

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