Publication Date
Authored by
Justin J. Yoon
Topic(s) Covered:
  • Optimization

With the increasingly competitive landscape of e-commerce and omni-channel delivery execution, the last mile has emerged as a critical source of opportunity for cost efficiency. Unmanned aerial vehicles (UAVs) have historically been utilized for military applications, but they are quickly gaining traction as a viable option for driving improvements in commercial last-mile operations. Although extensive literature currently exists on vehicle routing problems, research integrating drones as a supplement to these routing problems is scarce. This thesis explores the feasibility of deploying drones to the last mile, by modeling the cost of serving customers with one truck and multiple drones in the context of the traveling salesman problem. The model is constructed with mixed integer linear programming (MILP) optimization and assessed with a sensitivity analysis of several key parameters. We find significant median cost savings over TSP of 30 percent in the base case, and that these effects on savings can diminish to a median 4 percent in the worst case while surging up to 55 percent in the best case.