The Restaurant Meal Delivery Problem with Ghost Kitchens

Abstract

Restaurant meal delivery has been rapidly growing in the last few years. The main challenges in operating it are the temporally and spatially dispersed stochastic demand that arrives from customers all over town as well as the customers' expectation of timely and fresh delivery. To overcome these challenges a new business concept emerged, "Ghost kitchens". This concept proposes synchronized food preparation of several restaurants in a central complex, exploiting consolidation benefits. However, dynamically scheduling food preparation and delivery is challenging and we propose operational strategies for the effective operations of ghost kitchens. We model the problem as a sequential decision process. For the complex, combinatorial decision space of scheduling order preparations, consolidating orders to trips, and scheduling trip departures, we propose a large neighborhood search procedure based on partial decisions and driven by analytical properties. Within the large neighborhood search, decisions are evaluated via a value function approximation, enabling anticipatory and real-time decision making. We show the effectiveness of our method and demonstrate the value of ghost kitchens compared to conventional meal delivery systems. We show that both integrated optimization of cook scheduling and vehicle dispatching, as well as anticipation of future demand and decisions, are essential for successful operations. We further derive several managerial insights, amongst others, that companies should carefully consider the trade-off between fast delivery and fresh food.