Many consumers are demanding drones for delivery of their products. But how realistic is drone delivery?
A study published in the INFORMS journal Transportation Science examines the possibility of drones in e-retail and its effectiveness in certain population areas and locations.
"We analyze the tradeoffs between distribution costs and revenues under varying social difficulties with drones like customer preferences and regulatory and technological limitations. We then can make educated decisions on how many facilities to open, which services to offer at that facility and which services to make available to customers in certain areas," said Gzara, a professor in the Department of Management Sciences at Waterloo.
Researchers tested there design in three locations in New York City. They found that adding a fourth drone facility location increases operation costs and that these costs are not enough to cover the facility costs. Overall, they developed a design based on modeling and analysis that can be used by e-retailers to analyze variable factors for economic desirability when offering drone delivery services.
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Our results show that government regulations, technological limitations, and service charge decisions play a vital role in optimal configurations and drone target markets," continued Gzara. "Under current drone landing capabilities, a drone delivery service may not be possible in a densely populated area like Manhattan where demand for such a service is expected to be high."
Researchers concluded that using the right technological capabilities--leaders of e-retailing companies can target smaller markets and more price sensitive customers by offering affordable pricing on drone delivered orders.
Source: Science Daily
