This concept means that the efficiency and cost-effectiveness of delivering goods and services depend on how densely the demand and supply are distributed in a given area and how many constraints there are on the delivery process. Density refers to the number and location of customers and suppliers in relation to each other and the delivery network. Constraints refer to the factors that limit or affect the delivery options, such as time windows, vehicle capacity, traffic conditions, and customer preferences.
The higher the density, the lower the insertion cost, which is the additional cost of adding a new delivery to an existing route. This is because a higher density means that the delivery network can serve more customers with fewer vehicles and shorter distances, reducing fuel, labor, and operational costs. Conversely, the lower the density, the higher the insertion cost, which is the additional cost of adding a new delivery to an existing route. This is because a lower density means that the delivery network has to use more vehicles and travel longer distances to serve fewer customers, increasing fuel, labor, and operational costs.
The fewer the constraints, the easier the optimization of deliveries, which is finding the most efficient and cost-effective way to plan, organize, and execute the movement of goods and services from one location to another. This is because fewer constraints mean that the delivery network has more flexibility and choices in selecting the best routes, modes, and schedules for the deliveries, maximizing customer satisfaction and minimizing costs. Conversely, the more the constraints, the harder the optimization of deliveries, which is finding the most efficient and cost-effective way to plan, organize, and execute the movement of goods and services from one location to another. This is because more constraints mean that the delivery network has less flexibility and choices in selecting the best routes, modes, and schedules for the deliveries, compromising customer satisfaction and increasing costs.
Therefore, efficient optimization of deliveries is based on density and constraints, without density ability to achieve the optimal insertion cost in existing delivery network is limited. To improve the efficiency and cost-effectiveness of deliveries, companies can use various tools and strategies, such as logistics optimization software, data analysis, route optimization, and supply chain management. For more information, you can check out the following resources: