A Real Life Feasibility Analysis in a Delivery Service System

Online food ordering is an emerging field in recent years in the restaurant industry. The availability of this platform provides customers with convenient food shopping and restaurants with increased productivity and order accuracy. Feed Me Cyprus (FMC) is an online food ordering application, that has been in progress since the beginning, now it is considering to start the delivery service by itself. For this purpose, the feasibility of establishing the own distribution network for a real-life service system which is FMC was analyzed in this research. Two strategies have been developed, one with considering the restaurants separately and the other with grouping restaurants according to their locations. All related data and information are obtained from several resources and the problem was formulated as a mixed-integer programming model. The developed model was used to find the expected annual profit of FMC for all alternative scenarios. Both of the strategies, by trying different service prices: 6, 7,…,10 Turkish lira (TL) and delivery units were profitable. The second strategy is developed to increase the utilization of the delivery units and the expected profit of FMC by combining restaurants in groups based on their locations. By applying a comparison between the results of the two strategies, the second one was more profitable. In this way, some useful information and guiding comments for FMC are obtained by implementing several economic analyses based on the found numerical results of the second strategy. Except for some cases in price 6 TL, the results for the rest of the prices in economic analyses were acceptable based on their net profit and payback period. Keywords: Feasibility analysis, Distribution, Online food delivery, Economic analysis, Mixed-integer programming