To Start Up a Start-Up−Embedding Strategic Demand Development in Operational On-Demand Fulfillment via Reinforcement Learning with Information Shaping

Xinwei Chen; Marlin W Ulmer; Barrett W Thomas

doi:10.48550/arxiv.2504.05633

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To Start Up a Start-Up−Embedding Strategic Demand Development in Operational On-Demand Fulfillment via Reinforcement Learning with Information Shaping

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To Start Up a Start-Up−Embedding Strategic Demand Development in Operational On-Demand Fulfillment via Reinforcement Learning with Information Shaping

Xinwei Chen, Marlin W Ulmer and Barrett W Thomas

ArXiV.org

Cornell University

04/07/2025

DOI: 10.48550/arxiv.2504.05633

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Preprint (Author's original)This preprint has not been evaluated by subject experts through peer review. Preprints may undergo extensive changes and/or become peer-reviewed journal articles. Open Access

Abstract

The last few years have witnessed rapid growth in the on-demand delivery market, with many start-ups entering the field. However, not all of these start-ups have succeeded due to various reasons, among others, not being able to establish a large enough customer base. In this paper, we address this problem that many on-demand transportation start-ups face: how to establish themselves in a new market. When starting, such companies often have limited fleet resources to serve demand across a city. Depending on the use of the fleet, varying service quality is observed in different areas of the city, and in turn, the service quality impacts the respective growth of demand in each area. Thus, operational fulfillment decisions drive the longer-term demand development. To integrate strategic demand development into real-time fulfillment operations, we propose a two-step approach. First, we derive analytical insights into optimal allocation decisions for a stylized problem. Second, we use these insights to shape the training data of a reinforcement learning strategy for operational real-time fulfillment. Our experiments demonstrate that combining operational efficiency with long-term strategic planning is highly advantageous. Further, we show that the careful shaping of training data is essential for the successful development of demand.

Computer Science - Learning

Details

Title: Subtitle: To Start Up a Start-Up−Embedding Strategic Demand Development in Operational On-Demand Fulfillment via Reinforcement Learning with Information Shaping
Creators: Xinwei Chen - University of Tulsa
Marlin W Ulmer - Otto-von-Guericke-Universität Magdeburg
Barrett W Thomas - University of Iowa
Resource Type: Preprint
Publication Details: ArXiV.org
DOI: 10.48550/arxiv.2504.05633
ISSN: 2331-8422
Publisher: Cornell University; Ithaca, New York
Language: English
Date posted: 04/07/2025
Academic Unit: Bus Admin College; Provost Office Administration; Business Analytics
Record Identifier: 9984808277702771

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