A Dual Tandem Queue as a Model of a Pick-Up Point with Batch Receipt and Issue of Parcels

Summary: Parcel delivery networks have grown rapidly during the last few years due to the intensive evolution of online marketplaces. We address the issue of managing the operation of a network’s pick-up point, including the selection of the warehouse’s capacity and the policy for accepting orders for delivery. The existence of the time lag between order placing and delivery to the pick-up point is accounted for via modeling the order’s processing as the service in the dual tandem queueing system. Distinguishing features of this tandem queue are the account of possible irregularity in order generation via consideration of the versatile Markov arrival process and the possibilities of batch transfer of the orders to the pick-up point, group withdrawal of orders there, and client no-show. To reduce the probability of an order rejection at the pick-up point due to the overflow of the warehouse, a threshold strategy of order admission at the first stage on a tandem is proposed. Under the fixed value of the threshold, tandem operation is described by the continuous-time multidimensional Markov chain with a block lower Hessenberg structure for the generator. Stationary performance measures of the tandem system are calculated. Numerical results highlight the dependence of these measures on the capacity of the warehouse and the admission threshold. The possibility of the use of the results for managerial goals is demonstrated. In particular, the results can be used for the optimal selection of the capacity of a warehouse and the policy of suspending order admission.