Geographic significance of delivery zones in an e-commerce grocery delivery strategy

2006·7.7 MB·English

by  Herrel, Keith

GEOGRAPHIC SIGNIFICANCE OF DELIVERY ZONES IN AN E-
COMMERCE ENABLED GROCERY DELIVERY STRATEGY
By
KEITH CARL HERREL
A DISSERTATION PRESENTED TO THE GRADUATE SCHOOL
OF THE UNIVERSITY OF FLORIDA IN PARTIAL FULFILLMENT
OF THE REQUIREMENTS FOR THE DEGREE OF
DOCTOR OF PHILOSOPHY
UNIVERSITY OF FLORIDA
2006
ACKNOWLEDGEMENTS
The completion ofthis dissertation would not have been possible ifit were not for
the loving devotion ofmy wife, Tsuneko Herrel (also known as "Jaato") and the
enduring love and support ofmy mother Jean Herrel, who passed away before she
could see me graduate with my Ph.D. I know, however, that she will see me graduate
as she looks down from heaven. My three darling children, Schawn (also known as
"Chub"), Lina Lee (also know as "Screaming Meemie" or "Angel Princess"), and
Aaren (also known as "BoupToYouBoy"), have given me the will, perseverance,
fortitude, andjust plain heartwarming desire to achieve in life, both academically and
professionally.
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TABLE OF CONTENTS
Page
ACKNOWLEDGMENTS
ii
LIST OF FIGURES v
ABSTRACT
viii
CONCEPTS AND METHODOLOGY
1
Purpose 1
Concepts 3
Methodology 4
LITERATURE REVIEW 8
Online Grocers' Failures, Difficulties, and Possible Solutions 9
Spatial Decision Support Systems 18
Online Retailer Geographic Issues 25
Grocer Web Site Design Issues 29
Artificial Intelligence 30
Online Grocers' Store Locations 45
Geographic Information Systems for Traffic Flow Simulation 48
Geographic Information Systems for Vehicle Routing and Logistics 51
Networks 56
Data Visualization and Data Representation 59
Geographic Data and Surface Representation 66
Geographic Information Systems in Business 86
Enabling Geographic Information Systems Technologies 92
Spatiotemporality 101
Other Supporting Literature 107
SIMULATION ELUCIDATION 122
THREE SIMULATION SEQUENCES THAT RESULTED IN EXCEPTIONAL,
AVERAGE, AND MEDIUM PROFIT 178
Exceptional Profit 178
Low Profit 179
Medium Profit 179
CONCLUSION 186
SOURCES CITED 199
in
BIOGRAPHICAL SKETCH 215
IV
23781
LIST OF FIGURES
Figure
Hexagonal layout 7
1
2 Duration ofdelivery in days 146
3 Profit options settings 146
4 Minimum dollar delivery 147
5 Mandatory profit 147
6 Delivery charge per concentric region 148
7 Delivery charge per region interface 148
8 Delivery charge per region pop up form 149
9 Simulation options form 149
10 Number oforders error catching 150
1 Number ofdeliveries drop-down list 150
Duration ofdeliveries error catching 151
1
1 Duration ofdeliveries drop-down list 151
14 Region and legend color coordination 152
15 Report dashboard for the simulation run on April 13 152
16 Simulation main map result with profit settings 153
Pause function 153
1
1 Profit options form 154
19 Allow dispatch alerts radio button 154
1
Figure
20 Truck dispatch notification 155
21 Simulation main map result showing truck usage 155
22 Report dashboard for the simulation run on April 15 156
23 Population report 156
24 Profitability chart 157
25 Total mandatory profit per simulation report 158
26 Residence report 159
27 Settings report 160
28 Delivery report 161
29 Simulation options form 161
30 Simulation main map result showing three simulations 162
3 Simulation charts report 163
32 Simulation charts report showing second and third simulation 164
33 Settings report showing three simulations 165
34 Total mandatory profit per simulation report showing three simulations..165
35 Residence report showing orders from the second and third simulations..166
36 Mandatory profit per concentric region on profit options form 166
37 Mandatory profit per concentric region on settings report 167
38 Submit Delivery Charge button 68
1
39 Delivery charge per region interface 168
40 Delivery charge per region form 169
41 Region A3 showing the delivery charge 169
VI
Figure
42 Profitability chart showing profit for region A3 170
43 Mandatory profit per simulation report showing profit for region A3....170
44 Settings used with Intra-Regional Drive Time function 171
45 Intra-regional drive time interface 171
46 Intra-regional drive time pop-up form 172
47 Settings report showing 15 minute intra-regional drive time 172
48 Delivery report showing increased intra-regional drive times 173
49 Inter-regional drive time interface 173
50 Settings report showing increased inter-regional drive time 174
51 Delivery report showing increased inter-regional drive times 174
52 Overall average population per region 175
53 Population per region interface 175
54 Main map showing various amounts oforders placed 176
55 Regions showing higher and zero populations 176
56 Report dashboard showing various populations 177
57 Population report showing various populations 177
58 Profit and simulation options for high-profit scenario 180
59 Profitability quotient and profit gauge for high-profit scenario 181
60 Profit and simulation options for low-profit scenario 182
61 Profitability quotient and profit gauge for low-profit scenario 183
62 Profit and simulation options for medium-profit scenario 184
63 Profitability quotient and profit gauge for medium-profit scenario 185
vn
Abstract of Dissertation Presented to the Graduate School
ofthe University of Florida in Partial Fulfillment ofthe
Requirements for the Degree of Doctor of Philosophy
GEOGRAPHIC SIGNIFICANCE OF DELIVERY ZONES IN AN E-
COMMERCE ENABLED GROCERY DELIVERY STRATEGY
By
Keith Carl Herrel
May 2006
Chair: Grant Ian Thrall
Major Department: Geography
This work contains a geographic and logistic tool that will allow grocers who
are contemplating to deliver groceries via e-commerce to better decide whether they
should embark on that initiative. As web-based orders become more commonplace,
this computer application will have the potential to assist both large and small grocers
in the critical decision of starting a delivery service. The causes offailures ofgrocers
are traced. An operational computer program is demonstrated, with embedded
algorithms that make for a realistic simulation. The computer simulation together with
the user-friendly interface "front end" provide a practical and also scholarly solution to
a complex geographic problem.
vm
CONCEPTS AND METHODOLOGY
Purpose
The potentially lucrative grocery home-delivery market largely remains untapped
because ofthe financial risk and operational difficulty ofrunning such a service. Also
recent history is fraught with unsuccessful attempts at delivering groceries. The rapid
bankruptcy ofthe high-profile Webvan company is possibly the worst debacle ofall the
grocery delivery attempts.
This dissertation contains a logistical simulation application to solve one of the most
plaguing problems that some grocers have, which is the problem ofdeciding to initiate a
home delivery service or not. The primary purpose of the simulation is to reduce the
financial risk involved with rolling out an e-grocery initiative.
This means that grocers can take a quantum leap forward in satisfying the annual
multi-billion dollar United States grocery market by using my application. This is also
true for other industrialized countries. How is this possible? First, the great number of
grocer home delivery failures is no secret. This could be resulting in many grocers
hesitating to start a delivery initiative. Second, there could be a notable benefit to the
people in much ofthe industrialized world ifgrocers can successfully deliver to time-
strapped customers. Trafficjams and fuel consumption could decrease ifpeople do not
use their cars to shop after work. Third, a grocer can decrease the number ofemployees,
such as cash register attendants and stock persons needed in the brick-and-mortar store
because customers who would otherwise go to the store will not do so ifthe groceries are
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home delivered. Fourth, the infirm and elderly will benefit because the competition to
satisfy people who accept home deliveries could very well drive down delivery prices
that otherwise would be out ofthe economic means ofthese people. This list ofbenefits
is not exclusive, but should givejustification to the claim that grocery home delivery is a
benefit to not only the grocer who could make a greater profit or acquire more customers,
but also to society in general.
No computer simulation application as presented here has ever been presented in a
public forum, including academicjournal articles or news media. Grocers who are
contemplating deliveries will find this profit estimating simulation application easy to use,
powerful in its functionality, and versatile to allow its use in the actual delivery
operational operations Actual customer addresses can be input into the application to
generate simulated deliveries to loyal and prospective customers. Actual times that are
required to deliver to each region can be input before the simulation begins. The output of
the delivery data is shown is easy-to-read automatically generated reports. Round trip
truck times that include the average time required to deliver within each region can be
input separately into the application to give an accurate report of how long it takes a truck
to leave the store, deliver to the households, and return to the store. Also, the number of
trucks required to deliver to the population ofall the regions can either be specified or
calculated.
Because rarely is it possible to give a clear-cut yes or no answer about whether a
business venture should be undertaken or not, the conditions where a online e-grocer (or
a grocer who is taking orders by telephone) will reach a predetermined amount ofprofit
can be determined by running this application. In other words, questions like, "by what