{"title":"Partner with a Third-Party Delivery Service or Not? -- a Prediction-and-Decision Tool for Restaurants Facing Takeout Demand Surges During a Pandemic","authors":"Huiwen Jia, Siqian Shen, Jorge García, Cong Shi","doi":"10.2139/ssrn.3734018","DOIUrl":"https://doi.org/10.2139/ssrn.3734018","url":null,"abstract":"Amidst the COVID-19 pandemic, restaurants become more reliant on no-contact pick-up or delivery ways for serving customers. As a result, they need to make tactical planning decisions, including whether to partner with third-party service platforms that charge subscription fees or partial revenue from food sales, to form their own delivery team, or both. In this paper, we develop an integrated prediction-and-decision model to analyze the profit of combining the two approaches and to decide the needed number of drivers under stochastic demand. We first employ the Susceptible-Infected-Recovered (SIR) model to forecast future infected cases in a given region and then construct an autoregressive-moving-average (ARMA) regression model to predict food-ordering demand. Using samples of the predicted demand, we formulate a stochastic integer program to optimize food delivery plans. We conduct numerical studies using COVID-19 data and food-ordering demand data collected from local restaurants in Nuevo Leon, Mexico, from April to October 2020, to demonstrate the results of our approach for helping restaurants build contingency plans under rapid environmental changes. Our approach can be used for tactical decision making under unexpected demand surges and our computational results indicate that for restaurants having larger variances of the number of daily takeout orders and farther average delivery distances, they can gain more benefits from partnering with third-party delivery platforms.","PeriodicalId":253955,"journal":{"name":"TransportRN: Other Urban Transportation (Topic)","volume":"7 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-11-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126990644","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}