GREAT-ESDD: Graph Edge Attention Network for Effectively Steered Delivery Decisions

Abstract

Online, same-day delivery requires operators to constantly update their routes, and the routing cost for deliveries increases with the number of customers. Out-of-home (OOH) delivery options can help companies handle increasing customer numbers while keeping delivery costs low. We develop a dynamic pricing-and-routing framework for this online ordering scenario with home and OOH delivery options. First, we develop a neural solver for the capacitated vehicle routing problem (CVRP) based on the Graph-Edge-Attention-Network (GREAT). We train it to solve CVRP with varying instance sizes and starting conditions, allowing it to reoptimize partially executed routes under changing conditions. It is fast while achieving solution quality competitive with traditional baselines. Our solver processes several CVRP instances in parallel in batches and we use it to solve the candidate routing problems that arise from an incoming customer's choice of home or OOH delivery. This provides an estimate of the delivery cost increase per option, which we use to set dynamic prices. Further, it directly provides the updated route once the customer decides. We trade off delivery fees against routing costs and steer customers toward OOH delivery when home delivery would be costly. However, effective steering requires us to know the customer preferences. To learn those online, we use Thompson sampling with a Laplace-approximated posterior. We call the resulting framework GREAT-ESDD (GREAT for Effectively Steered Delivery Decisions). Compared to a traditional routing solver, it increases profit by around 11% under a similar pricing decision time budget. Moreover, we show that we can estimate customer preferences successfully, outperforming a static pricing strategy after only 5 days of simulated operations.