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Abstract This article formulates and solves a stochastic optimization model to investigate the impact of crowdsourced platforms (e.g., ridesharing, on‐demand delivery, volunteer food rescue, and carpooling) offering small, personalized menus of requests and incentive offers for drivers to choose from. To circumvent nonlinear variable relationships, we exploit model structure to formulate the program as a stochastic linear integer program. The proposed solution approach models stochastic responses as a sample of variable and fixed scenarios, and to counterbalance solution overfitting, uses a participation ratio parameter. The problem is also decomposed and iterated among two separate subproblems, one which optimizes menus, and another, which optimizes incentives. Computational experiments, based on a ride sharing application using occasional drivers demonstrate the importance of using multiple scenarios to capture stochastic driver behavior. Our method provides robust performance even when discrepancies between predicted and observed driver behaviors exist. Computational results show that offering menus and personalized incentives can significantly increase match rates and platform profit compared to recommending a single request to each driver. Further, compared to the menu‐only model, the average driver income is increased, and more customer requests are matched. By strategically using personalized incentives to prioritize promising matches and to increase drivers' willingness to accept requests, our approach benefits both drivers and customers. Higher incentives are offered when drivers are more likely to accept, while fewer incentives and menu slots are reserved for driver‐request pairs less likely to be accepted. 

Nonprofit Organizations (NPOs) rely on volunteers to support community needs but struggle with making strategic volunteer-to-task assignments to enable volunteer satisfaction, and completion of complex tasks. Creation of volunteer groups and their assignment to NPO tasks can help achieve these goals by providing volunteers with opportunity for networking, collaboration, and peer learning. However, strategically creating ideal assignments is challenging because (i) there are exponentially many ways a set of volunteers can be assigned in groups; and (ii) NPOs tend to have limited and uncertain data concerning volunteers’ personal preferences, availabilities, and motivations to participate. To address these challenges, this research contributes by introducing an integer programming framework to offer volunteers a menu of tasks to choose from and then based on volunteers’ willingness information, creates ideal homogenous volunteer group assignments. These groups are created such that the group collectively meet a task’s skill requirements and groups of volunteers of similar skill and affinity levels are prioritized. We apply the developed methodology to a case study based on a partner NPO that works with remote volunteers from multiple countries to produce online educational content. The menu creation method can improve NPO and volunteer-based performance metrics, where the most improvement is observed when a NPO is faced with very picky volunteers. Presenting volunteers with larger menus of tasks also leads to an improvement in ideal group creations. Implementing the group creation methodology helps obtain a statistically significant increase in ideal group creations but results in a tradeoff of decreased benefits to volunteers and the NPO. Finally, implementing a minimum desired group size does not severely impact most KPIs and would be beneficial for an NPO to implement as it encourages the creation and assignment of volunteer groups to tasks. 

Crowdsourced transportation by independent suppliers (or drivers) is central to urban delivery and mobility platforms. While utilizing crowdsourced resources has several advantages, it comes with the challenge that suppliers are not bound to assignments made by the platforms. In practice, suppliers often decline offered service requests, e.g., due to the required travel detour, the expected tip, or the area a request is located. This leads to inconveniences for the platform (ineffective assignments), the corresponding customer (delayed service), and also the suppliers themselves (non-fitting assignment, less revenue). Therefore, the objective of this work is to analyze the impact of a platform approximating and incorporating individual suppliers’ acceptance behavior into the order dispatching process and to quantify its impact on all stakeholders (platform, customers, suppliers). To this end, we propose a dynamic matching problem where suppliers’ acceptances or rejections of offers are uncertain. Suppliers who accept an offered request are assigned and reenter the system after service looking for another offer. Suppliers declining an offer stay idle to wait for another offer, but leave after a limited time if no acceptable offer is made. Every supplier decision reveals only their acceptance or rejection information to the platform, and in this paper, we present a corresponding mathematical model and an approximation method that translates supplier responses into updated approximations of the likelihood of a specific supplier to accept a specific future offer and use this information to optimize subsequent offering decisions. We show via a computational study based on crowdsourced food delivery that online approximation and incorporating individual supplier acceptance estimates into order dispatching leads to overall more successful assignments, more revenue for the platform and most of the suppliers, and less waiting for the customers to be served. We also show that considering individual supplier behavior can lead to unfair treatment of more agreeable suppliers. 

A recent business model, on-demand warehousing, enables warehouse owners with extra distribution capacity to rent it out for short periods, providing firms needing flexible network designs a new type of distribution capacity. In this paper, a heuristic is created to solve large scale instances of dynamic facility location models that optimize distribution networks over a multi-period planning horizon, simultaneously considering the selection of different warehouse types with varying capacity granularity, commitment granularity, access to scale, and cost structures. The heuristic iteratively solves selected single-period problems, creating a set of smaller subproblems that are then solved for multiple periods. Their decisions are combined to achieve feasible low-cost solutions, ensuring each customer’s demand point is covered for each period. A set of computational experiments recommends how heuristic settings should be set by industrial decision makers and illustrates the heuristic can generate high-quality solutions for large scale networks during long planning horizons and many decision periods. The heuristic can solve national-level instances with many customer demand points, candidate locations, different warehouse types and capacity levels and many periods. 

Peer-to-peer transportation platforms dynamically match requests (e.g., a ride, a delivery) to independent suppliers who are not employed nor controlled by the platform. Thus, the platform cannot be certain that a supplier will accept an offered request. To mitigate this selection uncertainty, a platform can offer each supplier a menu of requests to choose from. Such menus need to be created carefully because there is a trade-off between selection probability and duplicate selections. In addition to a complex decision space, supplier selection decisions are vast and have systematic implications, impacting the platform’s revenue, other suppliers’ experiences (in the form of duplicate selections), and the request waiting times. Thus, we present a multiple scenario approach, repeatedly sampling potential supplier selections, solving the corresponding two-stage decision problems, and combining the multiple different solutions through a consensus algorithm. Extensive computational results using the Chicago Region as a case study illustrate that our method outperforms a set of benchmark policies. We quantify the value of anticipating supplier selection, offering menus to suppliers, offering requests to multiple suppliers at once, and holistically generating menus with the entire system in mind. Our method leads to more balanced assignments by sacrificing some “easy wins” toward better system performance over time and for all stakeholders involved, including increased revenue for the platform, and decreased match waiting times for suppliers and requests. 

On-demand warehousing platforms match companies with underutilized warehouse and distribution capabilities with customers who need extra space or distribution services. These new business models have unique advantages, in terms of reduced capacity and commitment granularity, but also have different cost structures compared with traditional ways of obtaining distribution capabilities. This research is the first quantitative analysis to consider distribution network strategies given the advent of on-demand warehousing. Our multi-period facility location model – a mixed-integer linear program – simultaneously determines location-allocation decisions of three distribution center types (self-distribution, 3PL/lease, on-demand). A simulation model operationally evaluates the impact of the planned distribution strategy when various uncertainties can occur. Computational experiments for a company receiving products produced internationally to fulfil a set of regional customer demands illustrate that the power of on-demand warehousing is in creating hybrid network designs that more efficiently use self-distribution facilities through improved capacity utilization. However, the business case for on-demand warehousing is shown to be influenced by several factors, namely on-demand capacity availability, responsiveness requirements, and demand patterns. This work supports a firm’s use of on-demand warehousing if it has tight response requirements, for example for same-day delivery; however, if a firm has relaxed response requirements, then on-demand warehousing is only recommended if capacity availability of planned on-demand services is high. We also analyze capacity flexibility options leased by third-party logistics companies for a premium price and draw attention to the importance of them offering more granular solutions to stay competitive in the market. 

Peer-to-peer logistics platforms coordinate independent drivers to fulfill requests for last mile delivery and ridesharing. To balance demand-side performance with driver autonomy, a new stochastic methodology provides drivers with a small but personalized menu of requests to choose from. This creates a Stackelberg game, in which the platform leads by deciding what menu of requests to send to drivers, and the drivers follow by selecting which request(s) they are willing to fulfill from their received menus. Determining optimal menus, menu size, and request overlaps in menus is complex as the platform has limited knowledge of drivers' request preferences. Exploiting the problem structure when drivers signal willingness to participate, we reformulate our problem as an equivalent single-level Mixed Integer Linear Program (MILP) and apply the Sample Average Approximation (SAA) method. Computational tests recommend a training sample size for inputted SAA scenarios and a test sample size for completing performance analysis. Our stochastic optimization approach performs better than current approaches, as well as deterministic optimization alternatives. A simplified formulation ignoring `unhappy drivers' who accept requests but are not matched is shown to produce similar objective values with a fraction of the runtime. A ridesharing case study of the Chicago Regional Transportation network provides insights for a platform wanting to provide driver autonomy via menu creation. The proposed methods achieved high demand performance as long as the drivers are well compensated (e.g., even when drivers are allowed to reject requests, on average over 90% of requests are fulfilled when 80% of the fare goes to drivers; this drops to below 60% when only 40% of the fare goes to drivers). Thus, neither the platform nor the drivers benefit from low driver compensation due to its resulting low driver participation and thus low request fulfillment. Finally, for the cases tested, a maximum menu size of 5 is recommended as it produces good quality platform solutions without requiring much driver selection time. 

Logistics and distribution need to be more responsive and flexible to satisfy changing and demanding customer requirements due to e-commerce and customization trends. This work focuses in particular on warehousing, with the aim of understanding how emerging business models provide companies with additional ways to acquire warehouse space or fulfillment services. To do so, this work classifies and describes traditional warehouse models. Next, on-demand warehousing is analyzed as an emerging business-to-business (B2B) model that embraces the sharing economy principle of accessing resources rather than owning them. On-demand warehousing companies operate through online platforms connecting companies who have underutilized warehouses or fulfillment capacity to other ones searching for warehousing services. On-demand warehousing enables more flexible resource acquisition, as fixed cost investments are not necessary, and lengthy negotiations are eliminated through a standardized contract between the on-demand platform and the renter. This work contributes to the literature through an improved understanding and description of the main features of on-demand warehousing, representing a starting point for further research on this topic. Future developments are needed on the analysis of the main decisions a lender of space has to make when choosing an on-demand model.