Operational Design Problems in Emerging Markets

Department of Decision Sciences and Managerial Economics

We have witnessed the growth of new online platforms in the past decade, thanks to the advancement of technology and accessibility. In this talk, we focus on two operational design problems in such emerging markets. First, we consider a courier dispatch problem in on-demand delivery. While traditional wisdom indicates potential efficiency gain in routing by batching/pooling orders together for a single delivery trip, on-demand delivery, such as food delivery, brings new characteristics, such as spontaneous orders with less patient customers and smaller batch sizes. We address the question: With the objective of revenue maximisation, when is batching/pooling beneficial in on-demand delivery systems? Second, we consider a matching problem in online multiplayer video games. Since gaming platforms generate revenue through players’ engagement, we must design a proper matching policy to optimise players’ gaming experiences. We propose the optimal matchmaking policy to maximise player engagement and analyse the impact of widespread industry practises, such as adding AI-bots to the matching pool and implementing a pay-to-way system.