  The growth of e-commerce has created increasing complexity in logistics
services. To remain competitive, logistics and e-commerce companies are
exploring new modes as supplements to traditional home delivery, one of which
is the self-service parcel locker. This paper studies a parcel locker location
problem where a company plans to introduce the locker service by locating
locker facilities to attract customers. The objective is to maximize the
profit, accounting for the revenue and the cost of facilities. To estimate the
revenue, we use the threshold Luce model (TLM) to predict customers' likelihood
of using the locker service. We then propose a combinatorial optimization model
and develop exact solution methodologies that are practically implementable
according to our extensive computational experiments. In effect, our modeling
framework generalizes the traditional facility location problems based on the
binomial logit model (BNL) and the multinomial logit model (MNL), both of which
impose strong and strict assumptions on the customer's choice sets. That is,
they assume that the choice sets will either contain only one facility or all
facilities. In our numerical experiment, we demonstrate that using the BNL and
the MNL in the locker location problem could lead to, respectively, pessimistic
and optimistic revenue estimation. Consequently, the suggested location
decisions will be either conservative or aggressive. Our proposed model, by
contrast, can effectively relax these assumptions. Our results also reveal that
the aggressive decision due to the use of the MNL will incur an unnecessarily
high facility cost that cannot be compensated by the additional revenue,
leading to profit loss that can be significant in various scenarios. Finally,
we conduct sensitivity analysis on the input parameters and draw additional
implications.
